On 6 March 2014, Senators John Madigan and Nick Xenophon introduced the Flags Amendment Bill 2014—a private senators’ Bill—into the Senate. The Bill proposes to amend the Flags Act 1953 (the Act) to ensure that the Commonwealth only uses Australian flags that are manufactured in Australia from Australian materials.
On 20 March 2014 the Bill was referred to the Senate Finance and Public Administration Committee for inquiry and report on 16 June 2014. The report recommended that the Bill not be passed as it is inconsistent with the Commonwealth Procurement Rules (CPRs) and is not a commercially viable proposition. It noted:
the importance of CPRs in not only incorporating relevant international obligations under free trade agreements, but also in providing a framework for agencies to achieve best practice processes when procuring goods and services using public money.
The purpose of the Flags Act is to declare the Australian National flag and the Australian Red Ensign, which is described in detail and illustrated pictorially. Section 5 of the Act also allows the Governor-General to proclaim such other flags or ensigns of Australia as he/she thinks fit. Other flags proclaimed under section 5 are the Australian Aboriginal Flag, Torres Strait Islander Flag, Australian Defence Force Ensign, Australian White Ensign and the Royal Australian Air Force Ensign.
In their second reading speech in support of the Bill, Senator Madigan and Senator Xenophon expressed their serious concern for the Australian manufacturing industry, noting that:
We need to do more to ensure the Parliament and the Commonwealth can support the Australian economy and our manufacturing sector, despite free trade agreements. Most Australians would agree that the flags flying from our Commonwealth buildings are an excellent place to start.
Both Senators have previously raised the matter of Australian flags being made overseas, most recently at the Senate Budget Estimates hearings on 26 May 2014. They identified that Australian manufacturers are subject to occupational health and safety requirements, discrimination legislation, and environmental legislation that do not apply to overseas suppliers. The Senators expressed concern that this could result in Australian manufacturers facing a competitive disadvantage, and the procurement of overseas-made flags that were manufactured in ‘sweatshop’ conditions or in a manner that resulted in adverse environmental consequences. The Senators were informed that flag procurement was treated in the same way as other Commonwealth procurement- that is, that it must be conducted in accordance with the CPRs.
At the hearings, it was confirmed that the Australian flags currently flying over the Federal Parliament are Australian made. However, there is no guarantee that this will always be the case.
Commonwealth Procurement Rules
Under the Commonwealth Procurement Rules (CPRs) and Australia’s international trade obligations there is no guarantee that Australian flags will always be Australian- made. A submission by the Department of Finance to the Senate Finance and Public Administration Committee inquiry into the Bill, noted that a key aspect of the CPRs is non-discrimination. All potential suppliers are to be treated equitably and must not be discriminated against in relation to size, degree of foreign affiliation or ownership, location, or origin of their goods and services. The submission indicates that as the Bill seeks to discriminate between suppliers on the basis of their location and origin of their goods, it may be inconsistent with the CPRs and Australia’s international obligations, including under bilateral free trade agreements and treaties such as the General Agreement on Tariffs and Trade.
U.S. Flag Laws
Similar concerns have been raised in the United States. Currently US law requires that flags purchased by the federal government contain at least 50 per cent domestically manufactured materials. From February 2014, American flags acquired by the United States Department of Defence are required to be manufactured in the United States consistent with the ‘Berry Amendment’.
There was an attempt recently to extend the requirement to all American flags flying from federal buildings. The All-American Flag Bill was introduced to the House of Representatives on 13 June 2013 and to the Senate on 24 June 2013, but has not progressed. According to a news report the legislation has been difficult to pass partly because of trade agreements and partly because it is cheaper to buy flags from overseas producers rather than US producers.
In April 2014 Democrat Congressman Mike Thompson and Republican Congressman Peter King wrote a bipartisan letter to President Obama requesting that federal agencies be required to purchase American flags that ‘are 100 percent made in America, by American workers, using American grown and manufactured materials’.