Labour, human rights, environmental provisions
Labor members of the Committee are committed to trade policies consistent with Australian values of justice and equality, community views, workers' rights and the interests of developing countries. Trade agreements must be consistent with Australia's social and economic values, be based on widespread consultation, provide for appropriate minimum and enforceable labour and environmental standards, take account of social and economic impacts and allow sovereign governments to make decisions and implement policies in the interests of their citizens.
In this context, Labor members noted that concerns about human rights and labour rights and environmental standards in relation to the RCEP were raised consistently throughout JSCOT’s public hearings and in submissions by participants including by the ACTU, AMWU, ETU, ANMF – NSW, ActionAid, AFTINET and PHAA.
Report 196 notes that there are no chapters within the RCEP dedicated to the issues of labour and human rights or environmental standards. The report also notes the criticisms and concerns included in many submissions and public testimony centred on the lack of inclusion of human and labour rights and environmental provisions.
Report 196 notes that ‘According to DFAT, there was push back from nearly all other Parties to the inclusion of human, labour, and environmental rights provisions within RCEP in 2012 – as raised by the Australian Government at the beginning of the negotiation process – and the matter was not raised further.’
During the public hearing on 10 May 2021 (in response to a question from the Deputy Chair in relation to strengthening the obligations to labour rights and human rights) James Baxter, First Assistant Secretary, Office of Trade Negotiations, Department of Foreign Affairs and Trade, stated:
There's nothing specific in the provisions on the general review of the agreement about the inclusion of provisions on trade and labour or trade and environment, but there's nothing that prevents us or any other party raising that issue. It's something that should be considered in the course of that general review should we wish to do so.
On that basis, Labor members of the Committee sought to have this reflected in Report 196 in a new paragraph and were grateful this was supported by the Committee as a whole:
However, Mr James Baxter DFAT confirmed at the public hearing on 10 May 2021 that:
There's nothing specific in the provisions on the general review of the agreement about the inclusion of provisions on trade and labour or trade and environment, but there's nothing that prevents us or any other party raising that issue. It's something that should be considered in the course of that general review should we wish to do so.
Similarly, Labor members of the Committee sought to have the following recommendation included in Report 196 and were grateful this was supported by the Committee as a whole, as follows:
The Committee recommends the Government continue to pursue the inclusion of labour, human rights and environmental provisions within the Regional Comprehensive Economic Partnership Agreement at the time of the first review.
Myanmar
Concern for human rights in Myanmar was a significant focus of public inquiries and submissions, given the deteriorating situation in Myanmar following the military coup on 1 February 2021.
Labor has strongly condemned the coup in Myanmar and called for democracy to be restored. Labor has consistently called on the Government to impose additional targeted sanction against senior figures in the Tatmadaw and Tatmadaw-linked entities as well as extend visas for Myanmarese people in Australia.
Labor members note that the Government to date has failed to act on the recommendation from the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT)’s recent report on Australia’s response to the coup in Myanmar that:
The Australian Government further consider imposing targeted sanctions upon additional senior figures in the Tatmadaw and Tatmadaw-linked entities … who have played a role in the overthrow of democracy and subsequent violent repression of protests.
Labor members note that Report 196 states that:
the Committee encourages the Australian Government adopt this recommendation by the JSCFADT.
Labor members also note that the Government has to date failed to act on the recommendation from the JSCFADT’s report on Australia enacting Magnitsky-style laws that:
the Australian Government enact stand-alone targeted sanctions legislation to address human rights violations and corruption, similar to the United States’ Magnitsky Act 2012.
On this basis, Labor members of the Committee sought to have the following amended recommendation included in Report 196, but were unsuccessful:
The Committee recommends the Government continue to pursue the restoration of civilian, democratic rule in Myanmar as a foreign policy priority, and given the illegitimacy of the military junta in Myanmar the Government should urgently enact Magnitsky-style laws in Australia and adopt the recommendation by the JSCFADT that the Australian Government further consider imposing targeted sanctions upon additional senior figures in the Tatmadaw and Tatmadaw-linked entities.
Labor members of the Committee also sought to include a new paragraph in Report 196 and were grateful this was supported by the Committee as a whole, as follows:
Submissions to the Committee highlighted the importance of enacting Magnitsky-style laws, and the relevance of these laws in responding to the situation in Myanmar.
Labor members also argued that at the least the Government consider making a declaration at the time of ratification of the RCEP in order to support the Government’s previous statements and commitments the objective of returning civilian, democratic rule in Myanmar. While a declaration is not legally binding, as a political statement it is regularly utilised by signatories at ratification.
On that basis, Labor members of the Committee sought to have the following amended recommendation included in Report 196, and were grateful this was supported by the Committee as a whole, as follows:
The Committee recommends the Government continue to pursue the restoration of civilian, democratic rule in Myanmar as a foreign policy priority, and considers making a declaration to this effect at the time of ratification.
Aged care
The issues raised in Report 196 around staff ratios in the aged care sector and the ability of the Government to regulate the sector are incredibly important issues for our community, especially in the context of the findings of the Royal Commission into Aged Care Quality and Safety.
Therefore, the Labor member of the Committee request that the Government confirm the interpretations around staffing ratios and the ability to regulate the aged care sector reflected in Report 196 in writing to JSCOT. Doing so is critical to ensuring public confidence.
Report 196 notes the concerns raised in submissions and testimony around the ability of the Government to regulate the aged care sector, including specifically staffing ratios and improving the sector through the implementation of the recommendations of the Royal Commission into Aged Care Quality and Safety, and aged care ‘not specifically identified by Australia as a sector exempt from the application of Chapter 8 of RCEP in List B of Annex III.’
Based on these concerns, Labor members of the Committee sought to have this reflected in Report 196 in a new paragraph and were grateful this was supported by the Committee as a whole, as follows:
Notwithstanding the assurances provided in relation to Australia’s capacity to regulate in the national interest with respect to aged care, there was no clear explanation as to why Australia made a specific reservation under List B of Annex III with respect to child care but not for aged care. It is understandable that such inconsistencies give rise to public concern, and it would be better if they were avoided.
Report 196 notes that the RCEP refers to ‘limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service’ however Report 196 re-affirms that this would not prohibit the Australian government regulating and requiring staffing ratios.
Report 196 also re-affirms that states party to the RCEP have, according to Article 8.15 ‘the right to regulate and to introduce new regulations on the supply of services in order to meet its policy objectives.’ (RCEP, Article 8.15.5).
Therefore the Report notes that although aged care is not listed as a sector exempt from the obligations of the RCEP, Article 8.15 ensures that the Australian government could pursue additional regulation and higher standards in relation to the sector, including, as an example, the implementation of the recommendations the Royal Commission into Aged Care Quality and Safety.
Temporary movement of natural persons and labour market testing
Labor members note that it is Labor policy to oppose free-trade agreements that waive labour market testing.
Report 196 confirms that ‘Australia is not waiving labour market testing for contractual service suppliers and is not making any new commitments on labour market testing exemptions beyond existing commitments’.
Labor members note the concerns raised regarding harmonised recognition of qualifications, particularly trade qualifications during public hearings and DFAT’s confirmation on 10 May 2021 that:
there is nothing in RCEP that goes near requiring governments to harmonise qualifications or even to recognise qualifications from other RCEP economies.
Based on these concerns, Labor members of the Committee sought to have this reflected in Report 196 in a new paragraph and were grateful this was supported by the Committee as a whole, as follows:
Concerns were raised regarding harmonised recognition of qualifications, particularly trade qualifications. DFAT confirmed during a public hearing on 10 May that ‘there is nothing in RCEP that goes near requiring governments to harmonise qualifications or even to recognise qualifications from other RCEP economies.’
Labor members also note the ETU’s submission recommended the reinstallation of the Trade Recognition Services function of Trades Recognition Australia and we note that the RCEP would not prevent a future Labor government from pursuing such a reform.
ISDS
Labor members note that it is Labor policy to oppose free-trade agreements that include ISDS clauses and that no ISDS clause exists in RCEP. Concerns about ISDS were noted in many submissions and testimony including by the ACTU, ETU, AFTINET, AMWU, ActionAid and the Northern Territory Department of Industry, Tourism and Trade.
This report notes the RCEP does not include an ISDS mechanism, ‘although Article 10.18 identifies that the Parties shall enter into discussions on an ISDS mechanism no later than two years after RCEP’s date of entry into force.’
Labor members note that during public testimony DFAT confirmed they had not been given instruction to prioritise work towards pursuing an ISDS mechanism as part of the review process at the 2-year mark.
Mr Baxter stated on 10 May 2021:
In relation to ISDS, the parties did not agree to suggest that one outcome or the other should be more likely in relation to the inclusion of ISDS. It's clearly a neutral process, and so, as with all other amendments to the agreement, any outcome that requires a change to the current situation would only be effected if all RCEP parties agreed to it.
On that basis, Labor members of the Committee sought to have the following recommendation included in Report 196, but were unsuccessful:
The Committee recommends the Government not pursue the inclusion of an ISDS mechanism at the 2-year review stage and oppose attempts by other Parties to include an ISDS mechanism.
Labor members of the Committee then also sought to have the following recommendation included in Report 196, but again were unsuccessful:
The Committee recommends the Government report to JSCOT on the RCEP at least 6 months in advance of the two-year review and update JSCOT on the Government’s negotiating position regarding the inclusion of an ISDS mechanism.
Finally, Labor members of the Committee sought to have concerns reflected in Report 196 in a new paragraph and were grateful this was supported by the Committee as a whole, as follows:
Noting its recommendation in Report 193 that the Government brief the Committee biannually on the status of upcoming and current free trade agreement negotiations, the Committee expects that the potential inclusion of an ISDS in the RCEP at the two-year review period would be covered as part of such regular briefing.
Independent economic analysis
Labor supports the conduct of rigorous independent economic analysis of free-trade agreements that the Commonwealth pursues.
We note that the government has not commissioned independent economic analysis of the potential impacts of the RCEP.
Overwhelmingly inquiry participants called on the Government to conduct independent economic modelling.
We continue to call on the Government to conduct this independent analysis for the RCEP and release this so that it can form part of the public debate on the merits of the RCEP.
On that basis, Labor members of the Committee sought to have the following recommendation included in Report 196, but were unsuccessful:
The Committee recommends the Government conduct independent economic analysis of the RCEP and make this analysis available to the public.
Labor members of the Committee however sought successfully to amend paragraphs in Report 196 to better reflect the weight of submissions that argued for independent economic analysis and were grateful this was supported by the Committee as a whole: The amended paragraphs now read as follows:
A significant number of inquiry participants called for economic modelling to be conducted including ACCI, ACTU, ETU, AFTINET, PHAA and the Northern Territory Department of Industry, Tourism and Trade. Others, such as DFAT, questioned the overall benefits of economic modelling and Article Three represented by Ms Kirsten Bondietti argued against economic modelling of trade agreements like RCEP. Ms Bondietti from Article Three stated:
There's probably no economic analysis that can really assess the benefits of FTAs [Free Trade Agreements], keeping in mind it's easy to measure a tariff benefit in terms of cost savings. But many of these benefits that the FTAs deliver over time are dynamic. They relate to the competitiveness of services and investment, and they relate to the interconnectedness between the three— so services inputs that go into making goods and investments that support services that support goods. It's very difficult to measure in terms of numbers.
Noting the mixed evidence received, The Committee has considered in more detail the matter of economic modelling in relation to trade agreements should be left for its forthcoming in Report 193 on the treaty-making process in Australia. where it can be considered in more detail
Peter Khalil MP, Deputy Chair
Senator Tim Ayres
Senator Raff Ciccone
Senator Kimberley Kitching
Kate Thwaites MP
Josh Wilson MP