4.1
There was considerable convergence on what many considered to be a superior approach to addressing the objectives of the bill. As outlined in the last chapter, there was a consistent call for the amendment of the Customs Act 1901 to be applied to products of forced labour from any part of the world, rather than only those originating in the People's Republic of China (PRC). Many stakeholders also said this should be complemented by legislation allowing for the relevant authorities to issue product, company, region or country-specific measures in certain circumstances, including in relation to the current situation facing Uyghurs in the PRC.
4.2
Fair Supply submitted that the ban should be expanded to other countries 'identified as having forced labour issues'. Mr Roscoe Howell, Founding Director, Slavery Links Australia (SLA), said that Australia should not let other trading partners who are not party to the International Labour Organization (ILO) Forced Labour Conventions 'off the hook'.
4.3
Some submitters noted that introducing a blanket ban on the importation of any goods produced wholly or in part by forced labour would bring Australia in line with longstanding US policy, as reflected in its 1930 Customs Law.
4.4
Ms Lucienne Manton, Ambassador for People Smuggling and Human Trafficking, Department of Foreign Affairs and Trade (DFAT), said that '[e]fforts to address these issues need to be global' given forced labour issues 'cross borders and touch all parts of the globe'.
Withhold release orders
4.5
Many submitters discussed the US practice of issuing Withhold Release Orders (WROs) as a step that would be complementary to a global ban on the import of goods produced by foreign labour. Many of those advocating for a global ban nevertheless considered that the situation in Xinjiang was sufficiently dire and endemic to warrant a targeted WRO.
4.6
Ms Freya Dinshaw of the Human Rights Law Centre (HRLC) explained how WROs operate:
Pursuant to the US Tariff Act, anyone can petition US Customs and Border Protection to investigate suspected cases of imports produced with forced labour. If the investigations reveal reasonable evidence—and I note that it needs to only be reasonable but not necessarily conclusive evidence of imports having been produced with forced labour—US Customs can then detain the goods under detention orders known as 'withhold release orders'. The orders can target products from specific companies or, where appropriate, from specific regions. If an importer can demonstrate within a period of around three months or so that the goods weren't produced with forced labour, the goods are released. However, if they can't do this or if a conclusive finding is made by US customs that the goods were produced with forced labour, the goods will be destroyed or subject to seizure and summary forfeiture proceedings.
4.7
Ms Dinshaw further explained:
The US system therefore places the onus on importers and suppliers, who are best placed to be able to investigate their own supply chains to prove that their goods are slavery-free. Before they can regain market access, they must first address instances of forced labour in their operations to the satisfaction of the regulator. These laws have proven highly effective at prompting action from industry to address forced labour in recent times.
4.8
Ms Dinshaw informed the committee that the United States currently has 47 WROs, including 'a region-wide withhold release order in respect of all cotton and tomato products from the Xinjiang province, in addition to five orders that specifically target products by factories in Xinjiang and China that are connected to Uighur forced labour.'
4.9
Professor Justine Murphy and Dr Martijn Bhimani said that 'Australia should adopt a rebuttable presumption that all products made in XUAR or by XUAR citizens employed through "surplus labour" or "labour transfer" programmes are made with forced labour unless companies can prove otherwise'.
4.10
Professor James Cockayne outlined several advantages of this approach, including:
First, it creates greater predictability for importers and the domestic market more broadly about which goods or categories of goods will be subject to enforcement action.
Second, it enlists the broader public and civil society in the task of developing information to assess whether goods fall within the prohibited class. U.S. CBP has established formal procedures allowing for members of the public and non-governmental organizations to petition it to adopt WROs against specific importers. This not only spreads the cost of developing such information, but also strengthens the quality of information, given the specific expertise and global reach available to some NGOs.
Third, the WRO system gives CBP significant leverage over importers, allowing it to induce companies to change their labour management practices and adopt remedial measures, in order for access to the US market to be restored. This is a powerful and targeted tool for promoting respect for human rights and labour standards.
And fourth, such a scheme is more responsive to changing facts on the ground than an approach that rests on adoption of primary legislation to add and subtract goods from the list of prohibited imports, as this Bill does.
4.11
Dr Marinella Marmo and Dr Rhiannon Bandiera drew the committee's attention to the evidentiary standard required to issue a WRO – reasonable, rather than conclusive, evidence – and considered this would be appropriate for use by Australia.
4.12
Human Rights Watch (HRW), which called for a global ban on goods produced with forced labour, advocated for designating Xinjiang as 'a region where forced labor risks are high' and introducing a 'presumption of forced labour in cases of imports of finished goods from Xinjiang or imports of goods made with inputs from Xinjiang'.
4.13
In response to a written question on notice on why the United States was pursuing standalone legislation on Uyghur forced labour given its existing ability to issue WROs, the HRLC said that the draft US legislation 'builds on the existing US Tariff Act' and 'would act similarly to a WRO but focuses on all products from the region as a whole, rather than issuing multiple bans on a product by product or company basis'. It continued:
It is important to note that this standalone legislation still proposes to operate under the auspices of the broader, non-discriminatory framework set out in the Tariff Act in relation to banning imports produced with forced labour. The presumption is also able to be challenged on a case-by-case basis.
Given Australia does not have underlying legislation in place to address imports produced with forced labour, we believe that Australia should, as a necessary first step, introduce this, along with a WRO-style regime in order to be in a position to introduce more targeted measures focused on Xinjiang. In our view, this approach is more justifiable and less likely to be subject to challenge by China than legislation which specifically singles out all products from Xinjiang, for the reasons set out above. We note that it is possible for WROs to be framed broadly in any event so that they target whole product lines or industries, rather than just specific products or manufacturers. Thus much the same objective could be achieved through this approach.
Complementary measures
4.14
Several submitters advocated for additional measures to address the situation of Uyghurs in the PRC. Some of these are complementary trade measures. Others would seek to address the situation in Xinjiang through non-trade means.
Complementary trade measures
Advice to business
4.15
Submitters called for additional government advice to assist businesses seeking to avoid exposure to forced labour in their supply chains. Such advice could assist with implementation of the bill or a similar measure. Many cited the Xinjiang Supply Chain Business Advisory issued by the US Departments of State, Treasury and Commerce as a model. Submitters also pointed to the policy support provided to business by the Canadian and UK governments.
4.16
Australian Lawyers for Human Rights (ALHR) said it would be incumbent on the government 'to draft further provisions, regulations and guidelines' to assist 'businesses to make adequate risk assessments and undertake the required due diligence'.
4.17
Ms Vicky Xu provided evidence on the acute need for government advice and guidance for businesses operating in China:
Businesses in China, as it's communicated to me, feel that they don't specifically have instructions or guidance to fall back on from the democratic world. When they're pitched thousands of Uighur workers they're not in a position to refuse per se, because they need to maintain their presence in China and they want to continue to do business in China.
4.18
Fair Supply said that 'for maximum effectiveness and fairness, it is essential that the Bill’s passage be supported by accompanying guidance on the assessment approach(es) that are advisable for businesses' assessing what goods are likely to involve forced labour in certain regions. It added:
We strongly urge the Committee to consider the preparation of urgent and detailed accompanying guidance on the assessment approach(es) that entities should be undertaking by way of due diligence to satisfy themselves that they are not unknowingly importing products of a kind proscribed by the Bill.
4.19
Global Compact Network Australia (GCNA) called for the government to produce 'clear and practical guidance for all businesses (both large and SMEs) to assist them with identifying, preventing and addressing their involvement in modern slavery through their activities and business relationships'. It further specified that areas for guidance could include:
What constitutes modern slavery (as outlined in the MSA), so that companies understand what they are looking for.
Helping companies to identify red flags, including providing tools to assist them with understanding what products and services and jurisdictions are at most risk of modern slavery.
Explaining how modern slavery fits into the broader human rights risk management framework with reference to core international standards including the UNGPs.
Good practice examples around due diligence and remediation processes relating to conduct at home and abroad.
Good practice examples of multi-stakeholder partnerships to manage modern slavery in the context of human rights risks and to reduce the preconditions for modern slavery.
Direction that helps business navigate an approach where there are instances of state sponsored harm or weak governance that increases the risk of modern slavery.
Explanations and good practice examples of what business can do to identify, prevent and address involvement in modern slavery throughout the whole value chain, including downstream and upstream (i.e. suppliers and customers).
4.20
GCNA also called for the government to produce an annual list 'of products and their associated jurisdictions that are considered to be of at high risk of association with modern slavery'.
4.21
Many further suggested that it would be useful for the government to publish a list of products associated with forced labour. HRW called for the government to issue an 'annual list of countries and products that the Australian government considers to be produced at risk of forced labor' modelled on the US department of Labor List of Goods produced by Child and Forced Labor.
4.22
HRLC said the Australian Border Force (ABF) should compile 'an annual list of high-risk goods and their source countries which it has reason to believe are produced by forced labour' given that currently Australia business and civil society have to rely on the list published by the US Department of Labor.
4.23
In response to a question on notice, Dr Byler recommended the government should 'work with allies to compile lists of complicit suppliers and publicize declassified evidence of forced labour'.
4.24
Ethical Partners Funds Management (EPFM) also advocated for the use of:
a mechanism similar to the Trafficking Victims Protections Reauthorization Act (TVRPRA) and Executive Order 1312, under which the US Department of Labour produced a list of products and their source countries for which there is a reasonable basis to believe they are produced by forced or child labour. This mechanism also includes a clear process including how countries can protest being listed and how they can be removed from the list. Civil society and other stakeholders can make submissions to the process.
4.25
In addition, EPFM called for the government to consider a 'mechanism such as the EU Yellow Card, which constitutes an official warning system issued to trading partners to tackle issues (including human trafficking and forced labour)' before imposing sanctions.
4.26
In response to a question on notice, DFAT advised that it had 'set out the range of [its] concerns relating to Xinjiang' in its regular and ad hoc meetings with businesses. DFAT also encourages businesses to 'monitor public research and reporting and scrutinise their supply chains'.
Resourcing for investigations
4.27
The Uniting Church in Australia (UCA) and Salvation Army Australia (SAA) contended that the government would need to 'allocate resources' to investigate whether imports to Australia are a product of forced labour. UCA and SAA recommended Australia follow the US example by establishing 'specialised staff to investigate suspected cases of imports having been produced through forced labour'. The US Customs and Border Protection (CBP) established a division dedicated to such investigations in 2018.
4.28
Ms Dinshaw said that legislation would need to be accompanied by 'the establishment of a special investigations unit within the Australian Border Force' to ensure effective enforcement. In its submission, the HRLC recommended that the government establish a 'special investigations unit' within the ABF 'to identify and investigate suspected cases of imports produced with forced labour', modelled of the Forced Labor Division in the US CBP.
4.29
Professor Murphy and Dr Bhimani said the government should fund a 'government inquiry into the Xinjiang supply chain and systems development' to enhance the enforceability of relevant provisions.
4.30
Ms Xu also called for more assistance for researchers:
some auditing firms have said they are able to make a set of standards specific for the situation in Xinjiang and develop procedures to check. It could be desktop research. We are just researchers with an academic and journalistic background and we were able to identify quite a bit. Desktop research can raise red flags. They have visited neighbourhoods, interviewed residents around these factories. If enough red flags are seen, perhaps it could be categorised at a higher risk of Uighur forced labour.
4.31
Dr Darren Byler echoed this call:
I think we really need governments to fund research on this, to look into supply chains on their own and not depend on investigative journalists and think-tanks to do that work independently. I think we need more funding and concentrated efforts that would help the private sector to know which companies they should not be partnering with in China and where the evidence is. Those things should be provided to them by governments.
4.32
In response to a written question on notice DFAT noted that the government 'already supports research on supply chains.' It explained:
Research, including into modern slavery in supply chains, is one of five national strategic priorities in the Government’s National Action Plan to Combat Modern Slavery 2020-25. The Government has committed $10.6 million over five years to implement the National Action Plan. This includes $4.4 million in multi-year grant funding for civil society organisations, peak bodies and academic researchers to deliver projects that combat modern slavery in Australia, managed by the Australian Border Force. Round One of the grants program opened on 10 March 2021 and has a dedicated stream of funding for research into improving understanding of modern slavery risks in global supply chains, among other things.
Customs data
4.33
The government captures information about the importation of goods through its Integrated Cargo System (ICS). As outlined by the UCA and SAA, this includes 'details such as the nature and quantity of the product, the supplier and the intended recipient'. The information is not made publicly available.
4.34
Several submitters viewed that making this data publicly available to assist others to trace supply chains would deter Australian importers from dealing with suppliers linked to forced labour. Such information is publicly available in various other jurisdictions, including the United States and European Union.
4.35
The HRLC also called for greater transparency on and access to customs data to 'enable businesses and civil society to more accurately identify modern slavery risks in Australian supply chains, and incentivise companies to more closely scrutinise their potential links to forced labour.'
Non-trade measures
Strengthening the Modern Slavery Act
4.36
While some were of the view that the objectives of the bill would be better addressed in the framework of the Modern Slavery Act 2018 (MSA), others viewed the MSA as insufficient for this task. Regardless of position in this respect, there was strong support for the strengthening of the MSA.
Operation of the Act
4.37
The MSA entered into force on 1 January 2019. It requires entities based or operating in Australia with an annual consolidated revenue of more than $100 million to report annually on the risks of modern slavery in their operations and supply chains, as well as their actions to address those risks. The current requirements have resulted in companies uncovering hundreds of cases of modern slavery throughout supply chains.
4.38
The Australian Border Force (ABF) is responsible for driving implementation of the Act. There is also a Modern Slavery Expert Advisory Group, comprising 15 representatives, including 5 from peak bodies, which provides strategic advice to government to support the effective implementation of the MSA Act.
4.39
The whole of government submission outlined how the MSA operates. It noted that the government had established an online register of Modern Slavery Statements. The government also outlined some of its outreach efforts to promote implementation of the MSA:
the Government actively undertakes outreach to Australian entities on risks related to modern slavery and supply chains. Agencies, including the Australian Border Force and Department of Foreign Affairs and Trade, engage closely with peak bodies and individual businesses, both in Australia and overseas, as well as officials from state and territory governments to raise awareness of relevant supply chain risks. The Government encourages Australian companies and institutions to conduct appropriate due diligence, specific to their industries, to satisfy themselves that their commercial and other arrangements are consistent with Australian legislation and international standards.
4.40
The government noted that it is required to review the MSA in 2022 and that this will include 'consideration of compliance, penalties and other complementary measures'. It also noted its willingness to bring the review forward if required.
4.41
The government's implementation of the MSA is guided by the National Action Plan to Combat Modern Slavery 2020-25, which has five national strategic priorities: prevention; disruption, investigation and prosecution; support and protection; partnering; and research. The government committed $10.6 million to implementing the National Action Plan in the 2020-21 budget.
Shortcomings of the Act
4.42
Ms Keren Andrews of the HRLC noted that the 2017 report of the Joint Standing Committee on Foreign Affairs, Defence and Trade on establishing a Modern Slavery Act in Australia made a number of recommendations and that the government chose to enact one of those, relating to transparency, 'which requires companies to report on what they're doing about modern slavery, but it doesn't actually require them to do anything'. She further outlined:
at the moment, in the statements that we're looking at under the Modern Slavery Act, very few actually make commitments to do very much. For example, there has been a thousand or so statements now uploaded onto the register. If you search for the word 'Xinjiang', there are only 19 statements that mention that and only five of those have actually made commitments to stop sourcing from Xinjiang or to take action on this issue.
4.43
The HRLC noted that the MSA:
does not impose any obligations on companies to undertake due diligence to identify, prevent and address forced labour risks. There is no independent oversight and no financial penalties for non-compliance with MSA requirements. There is also no clear avenue for exploited or trafficked workers to seek remedy from companies. In other words, while companies are encouraged to report and take steps to address forced labour risks, there are few consequences for those that fail to do so.
4.44
Professor James Leibold said that the statements provided by companies pursuant to the MSA look 'like a box-ticking exercises done by lawyers'.
Possible improvements to the Act
4.45
There was considerable overlap among submitters about ways to strengthen the MSA. These include: lowering the annual turnover threshold for reporting, introducing penalties for non-compliance and establishing an independent watchdog.
4.46
Many submitters considered the reporting threshold of $100 million annual revenue too high. Dr Katherine Christ and Ms Kyla Raby pointed out that 'small and medium-sized enterprises account for over 90% of businesses currently operating in Australia'.
4.47
The Josephite Counter-Trafficking Project (JCTP) said that the review of the MSA should consider 'an Independent Anti-Slavery Commissioner be appointed whose role includes the investigation of allegations of forced labour, child labour and human trafficking in supply chains'. Amnesty International also supported this idea, stating that the Commissioner should 'also have the remit to comment on and make recommendations regarding companies based and operating overseas, but have a presence or trade with…Australian companies'.
4.48
Professor Cockayne said the MSA should be amended to create a 'Commonwealth 'Modern Slavery List' – a list of goods, classes of goods, regions and/or entities rebuttably presumed to be using forced labour or modern slavery' with changes to the list 'achieved through Ministerial declaration or secondary legislation'.
4.49
Professor Murphy and Dr Bhimani recommended that the government require 'companies to disclose any supply chain connections to XUAR in their Modern Slavery Act 2018 disclosures'. They also called for the Act's amendment to include 'an explicit prohibition on government procurement or corporate imports of products made, in whole or in part, through slavery, forced labour, or child labour'.
4.50
The Australian Council of Trade Unions (ACTU) said the government should 'withhold government procurement contracts from companies who have failed to report or show they are taking action on modern slavery in their supply chains'.
Diplomatic efforts
4.51
Many submitters also called for renewed efforts to persuade the PRC to ratify the Convention on Forced Labour 1930 and Abolition of Forced Labour Convention 1957.
Independent investigations
4.52
Submitters encouraged Australia to continue its advocacy in favour of an independent investigation into alleged human rights abuses in Xinjiang, including through access for the UN High Commissioner for Human Rights.
4.53
The International Coalition to End Transplant Abuse in China said the government should 'pursue through the United Nations the establishment of a Commission on inquiry to thoroughly investigate internment camps in China'. Australian Lawyers for Human Rights (ALHR) also called for the government to pursue a commission of inquiry through the United Nations.
4.54
The Campaign for Uyghurs (CFU) said Australia should push for the PRC to be stripped of its membership of the UN Human Rights Council.
4.55
In response to a written question on notice, DFAT observed that:
Independent and unfettered access to Xinjiang for international observers would assist by providing independent and credible assessments of the situation in Xinjiang. This is particularly important given the divergence between official statements and the growing number of credible reports of severe human rights abuses against ethnic Uighurs and other Muslim minorities, including testimony from those alleging detention.
2014 Protocol to Forced Labour Convention
4.56
Several submitters noted that Australia had not signed or ratified the 2014 Forced Labour Protocol to the Forced Labour Convention, which includes guidance on specific measures for eliminating forced labour, and called for it to do so.
4.57
Professor Leibold said it was 'difficult for us to speak with a strong moral voice internationally' without having ratified the protocol. Dr David Brophy said that joining this protocol would signal Australia's 'adhere to the international standards that it wishes to hold China accountable to'.
4.58
Be Slavery Free (BSF) outlined that, despite the government's indication that it intends to ratify the protocol, it cannot do so until Western Australia amends its industrial relations law.
4.59
In response to a question on notice, DFAT provided an update on the government's announced intention to progress ratification of the protocol, confirming that 'the final remaining compliance issue to be resolved is a gap in coverage for certain categories of workers currently excluded from the definition of 'employee' under Western Australia's industrial relations framework'. DFAT noted that the WA Government had 'committed to making the necessary amendments to its industrial relations legislation to ensure state laws are compliant with the Protocol'.
Sanctions
4.60
Some respondents called for the government to apply targeted sanctions against individuals and entities implicated in human rights abuses against Uyghurs.
4.61
A subset specifically called for the government to adopt Magnitsky-style legislation to facilitate the adoption of such targeted sanctions.
4.62
Professor Leibold noted that 'Uighur individuals who were listed as being associated with terrorist organisations' remained on DFAT's consolidated sanctions list and appealed for that list to be updated.
Mandatory human rights due diligence obligations
4.63
The HRLC recommended the government introduce mandatory human rights due diligence obligations for Australian companies. Ms Adams explained that this would be similar to 'an environmental impact assessment which companies have to put in here in Australia before they start an operation somewhere to show what the predicted environmental impacts will be and to take steps to mitigate those'. She noted relevant developments in Europe and further detailed:
it's going to increasingly be a question that is asked of the Australian government by Europe as to what it's doing to ensure that companies have a level playing field in this regard. Why is it that companies that do the right thing are being penalised or undercut by companies that turn a blind eye to these types of abuses? We would like to see a measure that also imposes the regulatory burden there back onto companies rather than onto government to take steps in the first place to ensure that when they're sourcing garments from China, what measures do they have in place to ensure that these aren't being produced with Uighur forced labour or from cotton that is picked by Uighurs in Xinjiang, for example? It's the direction that things are increasingly moving at an international level.
4.64
The HRLC noted that such a move would be in line with Australia's obligations under the UN Guiding Principles on Business and Human Rights. Amnesty International also noted the relevance of that framework, outlining that the Guiding Principles 'require that business enterprises take proactive steps to ensure that they do not cause or contribute to human rights abuses within their global operations and respond to any human rights abuses when they do occur'.
4.65
GCNA also expressed support for a mandatory human rights due diligence regime, which it said 'could involve civil penalties for non-compliance'.
4.66
The government stated that it had supported the UN Guiding Principles 'since their inception in 2011 and encourages businesses to apply the principles in their operations in Australia and abroad'.
Labour provisions in free trade agreements
4.67
Dr Christ and Ms Raby pointed out that the United States-Mexico-Canada Agreement contains a 'forced labour provision which explicitly requires each country to prohibit the importation of goods made with forced labour'.
4.68
Mr Roscoe Howell of SLA supported the introduction of a requirement that all Australian free trade agreements include a labour chapter. SLA noted and supported a 2013 private Senator's Bill that sought to bring such a requirement into effect.
4.69
BSF called for any amended or new free trade agreements to 'include clauses reflective of Australia's stance on modern slavery and respect for human rights including minimum standards for worker's rights'.
4.70
The ACTU called for the government to 'review the China-Australia Free Trade Agreement' to 'seek the inclusion of legally enforceable labour rights, including the elimination of all forms of forced or compulsory labour'.
4.71
In response to a written question on notice, DFAT advised that Australia takes a 'case-by-case approach to the inclusion of labour provisions in its FTAs'.