3.1
There was widespread support for the objectives of the bill. Many submitters supported the bill as drafted. Many others considered the objectives of the bill would be better achieved with a slightly different approach. A minority of respondents expressed opposition to the bill.
Support for government action
3.2
Be Slavery Free (BSF) affirmed the appropriateness of government action given the 'systemic, embedded and sanctioned' nature of the human rights violations, arguing that 'the actions of business and civil society become at best limited and at worst futile without Government engagement' in such cases.
3.3
Dr Katherine Christ and Ms Kyla Raby of the University of South Australia said that government action is needed 'where state-sanctioned forced labour is endemic' because consumers have 'questioned the efficacy of industry-led regimes designed to combat the slavery and poor labour conditions which occur in other countries'.
3.4
Dr Marinella Marmo of Flinders University and Dr Rhiannon Bandiera of Maynooth University said the issue could not be relegated to private enterprise because it is governments who are signatories to relevant human rights frameworks.
3.5
The Australian Council of Trade Unions (ACTU) said governments 'have a responsibility to effectively regulate global supply chains and hold corporations accountable for rights violations'.
3.6
Fair Supply, an Australian law firm dedicated to modern slavery issues, said that the bill was an 'important indication to the world that Australia will not leave its international human rights obligations, reflected in numerous treaties to which Australia is party, at the merely rhetorical level.' It continued:
Through accompanying capacity building, research, investigation and awareness raising, the Bill has real potential to achieve a practical reduction of the importation of products into Australia that have been produced using forced labour in the most unimaginably suppressive and rights-violating conditions.
3.7
Ms Angela Bell, National Manager of Ethical Clothing Australia (ECA), told the committee her view that:
when governments are aware of these issues overseas in any country or province or region that it is on government to act and to do something such as ban the importation of those goods and products, which assists consumers and takes the guess work away from a shopper such as one's self but it also protects the people who are actually being subjected to those abuses overseas as well.
3.8
Ms Carolyn Kitto, BSF National Co-Director, told the committee that existing legislation, policies, regulation and enforcement measures in Australia were not 'effective in addressing the risk of business involvement in gross human rights abuses'. She continued:
If not Senator Patrick's recommendations, what? A modern slavery due diligence approach is not addressing this state sanctioned forced labour issue in Xinjiang province. The approach of the Modern Slavery Act has been a step forward, but it's insufficient to address such issues as the imminent genocide of Uighur and other minorities in the Xinjiang region. Business needs the support and guidance of government.
3.9
However, Ms Vanessa Holben, Group Manager, Deputy Comptroller-General Customs, of the Australian Border Force (ABF), said the government was concerned that 'the presentation of the issue in the bill conflates distinct policy matters'.
Issues with the bill
Discriminatory approach
3.10
While several submitters were of the view that the situation in Xinjiang was sufficiently widespread and endemic that it should be the subject of specific legislation, a common critique of the bill was its singling out of the People's Republic of China (PRC). This was due to (i) the widespread nature of the problem around the world, (ii) the potential that such a measure could fall afoul of international trade rules, and (iii) the possibility of PRC retaliation.
Widespread nature of forced labour
3.11
Several submitters provided information on the widespread nature of forced labour, as well as details on state-sanctioned forced labour in various countries and regions. Fair Supply drew attention to the US State Department's Trafficking in Persons Report, which in 2020 listed 19 countries (including the PRC) as being of the highest level of concern with regards to the US Victims of Trafficking and Violence Protection Act's minimum standards for the elimination of human trafficking.
3.12
Professor Justine Nolan of the University of New South Wales and Dr Martijn Boersma of the University of Technology Sydney submitted that an estimated 40.3 million people worldwide are 'trapped in some form of modern slavery and of these, 34.9 million people are estimated to be in forced labour.' They further noted that modern slavery is most commonly associated with 'labour intensive, poorly mechanised activities', with the goods most commonly produced being 'bricks, cotton, garments, gold, sugar cane, cattle and fish.
3.13
Some submitters also noted evidence of groups other than Uyghurs being subject to forced labour in the PRC.
3.14
Dr Christ and Ms Raby recommended action to identify state-sanctioned forced labour in other regions, saying the government should 'convene a separate inquiry into other regions where state-sanctioned forced labour occurs and where the presumption of forced labour should be made.' Human Rights Watch (HRW) made a similar call for the government to form a 'high-level committee to examine whether the presumption of forced labor should extend to other regions and countries from time to time', which should include 'consultations with relevant stakeholders such as labor rights groups and unions'.
3.15
Slavery Links Australia (SLA) noted that other countries in our region had pulled out of the Abolition of Forced Labour Convention 1957 and should be included in any import prohibition.
WTO rules
3.16
Several submitters considered that the discriminatory approach taken in the bill could open Australia to challenge under World Trade Organisation (WTO) rules.
3.17
According to the Human Rights Law Centre (HRLC), the bill as drafted risks 'breaching Australia's international trade obligations', including its obligations in relation to 'non-discrimination, national treatment, most-favoured nation treatment, and fair and equitable treatment, under WTO rules and its two trade agreements with China'. HRLC considered that the bill could expose the Australian Government to legal challenge, including through investor-state arbitration or the WTO Appellate Body.
3.18
As explained by Professor James Cockayne:
The Chinese government might claim that the ban created in this Bill constitutes a violation of the foundational GATT/WTO principle that ‘like’ products be treated alike, and served as a smokescreen for protection. This could however be met by the response that all goods manufactured with forced labour, including those so manufactured in Australia, are prohibited from sale and trade in Australia. Such a claim would be stronger if the prohibition provided for by the Bill applied not only to China and PRC, but to import of goods manufactured with forced labour from any origin; and stronger still if there were a specific provision in Commonwealth law banning internal trade and commerce in goods made with forced labour, perhaps on the grounds they constitute proceeds of crime.
3.19
Professor Cockayne noted that 'WTO Members have long been split over whether to allow trade actions based solely on labour standards.' He continued:
Developing countries, in particular, have argued that industrialized countries could use labour standards as a smokescreen for protectionism and to undermine the comparative advantage of lower wage trading partners. Nonetheless, at the 1996 Singapore Ministerial Conference, WTO members – which did not yet include PRC – committed to a narrow set of internationally recognized ‘core’ labour standards, including a prohibition on forced labour. The 2001 Doha Ministerial Conference – which PRC attended as a Member – affirmed the Singapore declaration and the position of WTO members that labour standards should be enforced through the ILO, not the WTO.
3.20
Ms Freya Dinshaw, Senior Lawyer, HRLC, noted that the challenge would not have to be successful to be damaging:
given that the bill is clearly targeted towards China and is clearly discriminatory on its face, it will expose Australia to legal challenge—and the merits of that will become apparent as the years-long, expensive, onerous disputes process unfolds between the two countries. There is certainly a real risk that it could be exposed to challenge and eventually not be able to be enforced.
3.21
The government noted that any amendments to the Customs Act 'would need to take into account Australia’s international trade and investment law obligations, which constrain our ability to impose import restrictions, particularly where applied in a discriminatory fashion'.
Effect on bilateral relationship
3.22
The Joint Submission of the Chinese Community Council of Australia Inc., Multicultural Communities Council of NSW (MCC), National Chinese Australian Leadership Group & National Sikh Council of Australia Inc. considered that prohibiting the import of goods produced by forced labour from the PRC only, could be perceived as racist or xenophobic. They were also of the view that this approach would contribute to the deterioration of the bilateral relationship. At the public hearing, Dr Anthony Pun OAM, MCC Chair, reiterated this point, saying that he worried 'a lot of these anti-Chinese sentiments are creating xenophobic overtones in this country' and 'the retaliation from China on our trade'.
3.23
Ms Keren Adams, Director of Advocacy at the HRLC, said that it was very important 'that, if Australia passes legislation on this, it's done so in a way that is [in] alignment with our broad human rights frameworks and responsibilities and is not seen simply as just an anti-China measure'.
3.24
Dr Cockayne considered that the PRC government 'would almost certainly react with open hostility to adoption of the ban envisaged in the Bill'.
3.25
Dr David Brophy failed to see the rationale for taking a China-specific approach arguing that this was 'unlikely to be the most effective way to actually influence China's policies on this score' because the Chinese government will characterise it as 'part of a Western campaign to delegitimise it and harm its economy'.
Blunt approach
3.26
There was a variety of views on whether the prohibition on the import of all goods from Xinjiang, and all goods made with forced labour from the rest of the PRC, was warranted or too blunt to be effective.
3.27
Some submitters supported the presumption that any good from Xinjiang is the result of forced labour given both the evidence of widespread forced labour in the region and the difficulty of providing case by case evidence given the lack of access.
3.28
Professor Cockayne said that 'traditional supply-chain due diligence tools, such as on-site inspection' are ineffective in Xinjiang and that organisations should as such 'assume that goods sourced from XUAR, or from suppliers elsewhere in PRC that are using XUAR-sourced labour, are at high risk of having been made with forced labour'.
3.29
Ethical Partners Funds Management (EPFM) said it was 'widely accepted that due diligence in the Xinjiang region is extremely difficult, with access tightly controlled and conditions increasingly difficult to detect and monitor'.
3.30
Others did not think this was an optimal approach. Dr Brophy argued that such a ban 'would constitute sanctions on the entire Xinjiang economy'. The Australian Chamber of Commerce and Industry (ACCI) similarly said that the bill 'could lead to the lessening of economic opportunity for the Uyghur community'.
3.31
Professor James Leibold and Ms Kelsey Munro considered that a ban on all goods produced in Xinjiang would not only be 'unwieldy but likely impossible to enforce'. Professor Leibold told the committee that the government should instead take a 'more targeted approach, that goes to the root source of the problem, and that is Xi Jinping's brutal regime in Xinjiang', including through 'a more targeted set of legislation and sanctions.'
3.32
The government noted that import and export prohibitions usually 'have mechanisms facilitating a degree of flexibility in their application', without which trade with Xinjiang, 'even when forced labour is not known to be present in the supply chain', would be prohibited.
Scope
3.33
Some respondents felt that the import prohibition should apply not only to goods, but also to services and investment. Professor Cockayne said that Australian investment in companies involved in Uyghur forced labour should also be considered in the policy response.
3.34
Australia-Hong Kong Link (AHKL) was in favour of the bill explicitly stating that the prohibition of the import of goods would apply 'if they are produced or manufactured wholly or in part in Xinjiang', pointing out that such wording has been used in legislation in Canada and the United States.
3.35
SLA noted that it may be helpful to clarify the definition of forced labour in the explanatory memorandum given that (i) the Criminal Code meaning of forced labour has 'limited extra-territorial effect', as opposed to the definition of that term contained in the relevant International Labour Organization (ILO) conventions and (ii) the memorandum also refers to slavery, although the bill limits itself to forced labour.
Need to coordinate with likeminded States
3.36
Many submissions pointed to relevant steps taken in other countries, particularly the United States, United Kingdom and Canada, as discussed above, but also the European Union, France, the Netherlands and Germany.
3.37
Professor Cockayne expressed the view that 'given the small fraction of exports from XUAR for which Australian demand accounts' a ban adopted solely by Australia is unlikely to be effective. He considered that working with other like-minded countries would be more effective.
3.38
Many also called for Australia to improve its coordination with such States on this issue, including by taking action in a multilateral setting. Professor Leibold and Ms Munro stressed 'the importance of acting multilaterally in addressing forced labour:
To be truly effective, governments who are concerned about Uyghur forced labour and wider human rights abuses occurring in China, and elsewhere, must act collectively. A multilateral approach will provide companies with clarity and stability in how any new legislation, sanctions or reporting requirements will operate across multiple jurisdictions and increase the effectiveness of any bans or sanctions.
3.39
Submitters noted the possibility of advocacy and action in two main multilateral bodies: the ILO and the Human Rights Council (HRC). The Uyghur Human Rights Project (UHRP) said that the government 'should raise the issue of state organized forced labour implemented by the Government of China' at the next meeting of the ILO governing body.
3.40
Ms Ramila Chanisheff, President of the Australian Uyghur Tangritagh Women’s Association (AUTWA), said that Australia should 'work with the Five Eyes and other like-minded democratic countries' such as 'the US, the Netherlands, Canada and the UK'.
3.41
AHKL said that '[t]rade restrictions, such as the ones outlined in the Bill, are more effective if they are part of the coordinated responses from like-minded countries and with clear advice and guidance to businesses'.
3.42
The British High Commission in Canberra said that the United Kingdom 'believes that coordinated international action is needed to address the risk of forced labour entering global supply chains, and the UK welcomes the close partnership with Australia on this issue'.
3.43
The US Department of State said that '[c]ommunication and coordination on these trade issues should continue as we advance our shared goals of addressing human and labor rights abuses'.
Implementation and enforcement issues
3.44
Several submitters raised concern regarding the feasibility of implementing and enforcing the bill as drafted.
3.45
The government in its submission said that it had chosen to focus on 'transparency, public accountability and business-driven change through a risk-based reporting framework under the Modern Slavery Act' because 'action involving trade and importation restrictions, such as the import prohibition proposed by the Bill, inherently raises challenges in operation and implementation'.
3.46
Ms Holben of the ABF said that the government view was that the bill did not 'take into account the practicalities of implementation' and 'suggests that it is possible to identify goods made by forced labour, regional and provincial origins of products, and modes and methods of product manufacture at the border'.
3.47
The government noted that the bill 'does not propose a means by which goods, including individual components of the goods, can be identified as being from Xinjiang, or the product of forced labour'. It continued:
The vast majority of consumer goods and other refined products (such as textiles, electronics, and vehicles) involve long and complex supply chains. Manufacturing can take place in various stages and in various places. Manufacturing often involves combining components from different origins, different manufacturers, and different manufacturing methods to create a single finished product. Unlike basic raw materials, the importation of a manufactured product does not involve one clearly identifiable origin, source or method of manufacture.
This complexity means there is rarely one single origin or method of manufacture applicable to a product. The components of complex manufactured goods, or their origins and methods of manufacture, are also not easily or reliably identifiable at the border, or otherwise. These evidentiary difficulties mean that the prohibition proposed by the Bill could not be applied to complex consumer goods and other refined products that carry high risks of modern slavery (such as textiles, electronics, and vehicle manufacturing).
3.48
The ACCI foresaw 'significant difficulties for business and regulators in identifying the products emanating from the region in question'.
3.49
Global Compact Network Australia, the Australian, business-led network of the UN Global Compact, said that many businesses would find it 'challenging to meet the requirements of an import ban due to the complexity of supply chains and limited visibility beyond tier one level'.
3.50
The Uniting Church in Australia (UCA) and Salvation Army Australia (SAA) noted the 'real risk that Xinjiang goods produced by Uyghurs or other persecuted minority groups would be 'laundered' to mask the origin of production' with indirect shipments of items containing cotton 'along the intra-Asia trade route….challenging to follow'.
3.51
Professor Cockayne noted that the bill 'relies on existing administrative and enforcement arrangements under the Customs Act 1901 (Cth)' and will as such:
create a non-trivial and ongoing burden on relevant customs authorities to furnish frontline customs officers with the information they need to reliably distinguish goods prohibited under this ban from other, permitted goods. The costs of developing that information will be borne by the taxpayer, and are not identified or discussed in the Explanatory Memorandum. Given the challenges involved in reliably assessing whether goods are sourced from XUAR and/or produced with forced labour, the danger of this approach is that it will simply lead to lax and unpredictable enforcement. This may […] undermine the efficacy of the legislation and create an uncertain commercial environment for importers.
Audits and accreditation
3.52
Ms Xu observed that since the publication of the Uyghurs for sale report, she had 'heard from business alliances, auditors, and researchers, who say it is extremely difficult to follow standard auditing protocols when it comes to human rights audits and Uyghur-related audits'. She continued;
The Chinese Communist Party considers any form of investigation of the treatment of Uyghurs as crossing a red line. Auditors are routinely denied access, and greeted by hostile government officials or police officers when they visit Chinese factories.
3.53
Ethical Clothing Australia (ECA) said it is 'well documented that the [textile, clothing and footwear] industry is notorious for the exploitation of garment workers around the globe'. In addition, the 'complexity of supply chains in the TCF industry allows for poor practices, exploitation, and cases of modern slavery to flourish'.
3.54
Ms Bell, ECA National Manager, noted that 'audits can be fraudulent'. She continued:
That's obviously highly concerning and that's why having a certification or something which is more rigorous, an independent body going in to check, not one of the companies paying is of more benefit to the consumer or the purchaser who's concerned about where those products have come from or where the fibres have come from.
3.55
Fairtrade Australia and New Zealand does not have certified entities operating in Xinjiang, but provided information relevant to accrediting fair trade standards, including with respect to forced labour, more broadly.
New technologies
3.56
Professor Leibold and Ms Munro called for the government to investigate the possible role of new technologies 'such as isotope, microbiome, blockchain and other tracing technologies' can play to empower 'companies and governments to more efficiently and effectively trace their supply chains'.
3.57
Ms Kitto described some of the new technologies that could be employed to assist implementation of the Bill or a similar measure, including: Bluenumber; Sourcemap, 'which is a company that can actually trace the supply chain back to the Xinjiang region, and they have been working with companies who are affected by WROs in the US to provide them with the information that is required for them to show that their products are not from that area'; and Oritain, a New Zealand company that 'can track the isotopes in products to within a kilometre of where that product comes from.' Ms Kitto also mentioned an Australian resource:
Sydney University has the Eora database, which tracks all of the trade routes. They have internal Chinese trade routes. They can track 15,900 products in terms of how they move around the world economically. So that kind of data is now quite readily available. They can track supply chains to tier 10.
3.58
In its submission, BSF provided additional detail on Sourcemap:
Companies like Sourcemap are offering businesses concerned about forced labour (particularly in relation to Xinjiang Province and Uyghur forced labour) a streamlined due diligence solution that can be rapidly deployed across a global supply chain for any industry. The supply chain mapping approach uses a vendor portal with cascading functionality to quickly and accurately identify sub-suppliers and ensure that they have the right policies and procedures in place, and transaction traceability to verify the authenticity of each inbound shipment. It enables business to provide the evidence they need to exclude forced labour.
3.59
BSF also provided detail on Bluenumber:
Bluenumber is an NGO providing a platform for bottom-up opt-in by any workers in a supply chain. Bluenumber triangulates the count of workers volunteering their locations, declaring what they are working on, for whom, and with what that supplier produces. People with bluenumbers show up on a supply map so their existence can be matched with products. Bluenumber measures supply chains using unfiltered data provided by people, not just third-party audits of facilities and sampled product outputs. Bluenumber would enable enforcement when every legitimate worker is properly co-located within the supplier’s licensed facilities and their smartphone logs reasonable working hours at that place. A spot check on any audit report would simply require calling or messaging the worker directly to check details of their working conditions. Any unanswered or blocked call from a previously registered person would raise a red flag.
3.60
Finally, on Oritain, BSF submitted:
Oritain traces actual products back to their true origin using advanced science. They analyse Isotopes and Trace Elements from samples of products and materials, to determine their origin or other characteristics. They can accurately determine the geographic origins of any natural product.