The resource industry’s recent report on local content was printed in Gladstone by a local printer on the morning it was launched by the Queensland Resources Council (QRC) – a great example of the ‘buy local’ approach that has seen the mining and exploration industry’s regional spending figures skyrocket over the past 12 months.
The report shows that Queensland businesses have seen their pay cheques grow by 19 per cent or $3 billion over the past year.
An extra $3 billion is a big deal for the more than 14,000 Queensland businesses who supply the resource industry. Many of these Queensland suppliers are small businesses and regional businesses who may not otherwise have a source of revenue growth.
The resources sector has long recognised the value of local content.
For the industry, buying locally is a great way of reducing costs. Buying from a local business can reduce risks and can increase the long-term sustainability of regional economies. Buying locally also demonstrates the sector’s long-term commitment to its local community.
QRC Chief Executive Ian Macfarlane said resource companies were redirecting spending away from overseas and interstate suppliers to make sure their spending stayed here in Queensland.
“In 2017-18 the Queensland resources sector purchased $19.3 billion worth of goods and services with Queensland businesses. That’s 69 per cent of the industry’s total spending, which compares to just $400 million with international suppliers,” Mr Macfarlane said.
Each year, QRC asks members to provide their spending data so we can build up a picture of the industry’s contribution to the economy. Last year, the industry bought a total of $28.1 billion dollars of goods and services.
But how much of that spending was local? How can regional businesses work with the industry? These are the questions that QRC aims to answer in the 2018 Code Effectiveness Report, released in April 2019, which examines the effectiveness of the Queensland Resources and Energy Sector Code of Practice for Local Content.
The report provides a snapshot of the sector’s local content achievements over the year and is an industry-led initiative. The Code is compulsory for all companies seeking approval through the Queensland Government’s Coordinator General’s office.
The report also includes several case studies of companies working with their local suppliers to create opportunities and build capabilities. It’s a great reference source for the industry, to see how others are working with their local businesses.
This year, the case studies highlight that local businesses are increasingly valuable as a source of innovation – they are showing the industry new ways to add value. From running pilot programs to supporting local apprentices, it’s clear from the case studies that there’s more than one way to support local industry.
The QRC report shows that 69 per cent of the industry’s spending was in Queensland. That’s an increase of an extra $3 billion to Queensland businesses, up 19% on the previous year.
The sector also halved its expenditure with international businesses in a year. In 2017-18, the Queensland resources sector spent less than 1% of that $28.1 billion with overseas suppliers.
The QRC’s local content report hinges on the central principle of full, fair and reasonable endeavours. That’s the standard that the industry wants to be held to by suppliers and would-be suppliers – did the industry provide a full, fair and reasonable opportunity for your business to sell to the resource industry?
Mr Macfarlane said a report by CSIRO found people wanted industry and government to work together with communities and wider society to promote effective, constructive, and mutually beneficial relationships.
“Companies are listening to the need to buy locally and responding to the challenge by focusing their procurement strategy on their social licence to operate. A recent QRC survey of resource CEOs found 41 per cent had engaged more local suppliers as a direct result of the increasing capabilities of suppliers in their region.
“By spending in Queensland the sector promotes the long-term sustainability of local economies and boosts employment and economic growth by expanding local industries.”
The resources sector was already doing its bit to keep Queensland strong – making a contribution of more than $62 billion to the State’s economy or one in five dollars, supporting more than 316,000 full-time equivalent jobs or one in eight jobs in the Queensland workforce, while working with 1260 community organisations and generating more than 80 per cent of the State’s record $80 billion annual export sales.
To read more about the positive impact of Queensland mining and exploration businesses buying local, read the full 2018 Code Effectiveness Report here.