Weld Australia CEO Geoff Crittenden said it did not matter whether the fabrication was conducted in Australia or overseas, if the work did not comply with Australian Standards.
He said that without regulations making it mandatory to abide by Australian Standards when manufacturing, fabricating and erecting steel all procurement decisions would continue to be made according to the lowest common denominator, which was cost.
Crittenden said aside from increasing overall costs for public and private infrastructure projects, the regulatory vacuum was putting Australian lives at risk.
"Given a level playing field, Australian welding is internationally price competitive and can deliver world class quality," he said.
"However, it appears that this is not immediately obvious to those charged with procuring multi-million-dollar projects."
Crittenden praised the openness of Orica CEO Alberto Calderon in his recent speech to the Western Australian Mining Club, where he told the room how faulty welding done in China had caused a "terminal cancer of leaks" at the explosives plant in the Pilbara jointly owned by Orica and Yara.
Calderon said leaks at the plant made heat exchange equipment "absolutely useless", and he blamed JV partner Yara for not properly managing the quality of the welding.
The defective equipment has cost about $340 million and the delays in production are costing Orica millions every month.
"Weld Australia congratulates Mr Calderon for his openness and honesty in raising the issue of weld quality," Crittenden said.
"In most cases, the large multinationals and governments who suffer the same fate do everything to cover up their problems."
Crittenden cited another case where a senior engineer from an unnamed large mining company who had procured large amounts of fabricated steel offshore during the last mining boom reported the poor quality of the welding stymied production and left the company with massive maintenance bills.
Crittenden said to add insult to injury that same miner has just announced it was buying 20,000 tonnes of structural steel from a Chinese supplier for a new mine.
He said to be fair, the problem was not limited to Chinese fabricators but it still bemused him why the same mistake was being repeated time after time.
"From an outsider's perspective, it appears that clients are taking a very narrow view of project costs, allowing ‘cost to buy' to dominate the procurement process rather than whole of life[cost to commission and to operate]," he said.
"If this is the case, then they are not demonstrating value for their shareholders or tax payers -merely concealing the true cost of the project."
Crittenden said that since the beginning of the previous mining boom, the Australian steel fabrication industry had shrunk 30% because of short-sighted procurement decisions and many companies had gone broke.
He said that had led to thousands of welders leaving the trade.
