Related News

US deepens banks’ role in detecting export control violations

Twinco lands bumper debt facility to expand sustainable supply chain finance

Germany offers cheaper export credit support in new climate policy

Coface names China country manager

WTO slashes 2023 trade growth forecast by more than half amid slowdown

Australia should adopt a US-style system of impounding imports of products that may have been produced using forced labour, a cross-party group of lawmakers has recommended, as it called for changes to the country’s modern slavery law.  

A parliamentary inquiry has urged the Australian government to empower border authorities to detain shipments under a scheme similar to Washington’s withhold release orders (WROs), which applies to designated products imported from a country or region. If an importer is unable to prove the absence of forced labour from the product’s supply chain, it must re-export the goods. 

The Australian senate’s foreign affairs, defence and trade committee also says in a June 18 report that the government should beef up the country’s Modern Slavery Act, after government officials conceded in a public hearing in April that there has been little to no enforcement of the law. 

Currently, companies with annual revenue over A$100mn are required to provide a report to the government on slavery risks in supply chains and how they are being addressed. The committee says in the report that there is “merit” in trimming the revenue threshold, noting that it currently excludes the vast majority of Australian firms. 

It also says the government should compile a list of products or companies considered to be at high risk of being produced by forced labour. Australian companies are currently forced to rely on similar lists maintained by US authorities.  

The committee, which is made up of lawmakers from government and opposition parties, convened the inquiry to study a bill proposed by independent senator Rex Patrick aimed at banning products made from forced labour in the Chinese province of Xinjiang.

But the committee recommends that the government bans the import of all products that are made at least in part with forced labour, regardless of the country of origin. A spokesperson for Patrick, who is on the committee, did not respond to a request for an interview. 

Non-profits, Uyghur community organisations and even government officials told the April hearing that the Modern Slavery Act, which came into force in 2019, is not effective enough at deterring forced labour in supply chains of Australian importers.  

The law is due for imminent review and the committee says in its report it should be carried out as soon as possible. In addition to requiring more companies to report under the Act, the senators also support penalties for non-compliance. 

The recommendations have been welcomed by anti-slavery campaigners. 

“The quality of the reports [required by the Act] and the way in which companies report tends to be very superficial based on what we’ve seen so far,” Keren Adams, legal director of the Human Rights Law Centre, tells GTR. 

“We’d like to see penalties not just for non-compliance with reporting, but also for providing insufficient or misleading information.” 

The recommendations follow similar inquiries by lawmaking bodies in the US, UK and elsewhere aimed at strengthening import controls to deter the use of forced labour in supply chains.

Most of the international focus has been on Chinese solar, textile and food suppliers’ use of forced labour from the country’s mainly Muslim Uyghur minority, which Western governments and rights groups say faces a campaign of ethnic cleansing and possibly genocide directed by Beijing. 

The Australian government has not yet responded to the committee’s report, which it typically does weeks or several months after publication.  

“The key issue is what will governments actually do to enforce these laws and to partner with businesses to make sure that these human rights atrocities are no longer committed,” says Carolyn Kitto, head of non-profit Be Slavery Free.  

Prime Minister Scott Morrison’s participation in conversations about forced labour with other leaders at the G7 summit in Cornwall earlier in June is a sign the government may act on the report, Kitto hopes. 

‘Rebuttable presumption’ 

The committee recommends that the US WRO system should be adopted in Australia by empowering “the Australian Border Force to be able to issue rebuttable presumptions for specific goods, companies and/or regions with particularly high risk of being associated with forced labour”. 

It approvingly notes submissions to the inquiry which said authorities should be able to make WROs based on “reasonable” rather than conclusive evidence of forced labour and that as soon as the powers are in place, an order should be made regarding the import of clothing products that include cotton from Xinjiang.   

The committee did not detail the legislative or regulatory changes that would be required to introduce such a system. 

Any move by Australia that specifically targets imports from Xinjiang is likely to further worsen trade ties with China, which have been battered by unilateral bans or tariffs on Australian exports to China and calls by Australian officials for an investigation into the origins of Covid-19.  

Kitto tells GTR the government has so far had a cool attitude to the concept of withhold release orders and custom bans. “There’s no point in having them if you can’t enforce them. And that’s always been a huge struggle: the response from government has been ‘we don’t think that this is enforceable’. We would disagree with that. We think it is.” 

The German parliament on June 11 passed a law requiring companies with over 3,000 employees to conduct human rights due diligence to identify risks in their supply chains.  

The law is likely to push German companies to exit their investments in Xinjiang or face huge fines, according to a parliamentary research paper cited by Politico. 

Australia should adopt similar rules for companies operating in high-risk regions or industries, says Adams, noting that modern slavery is one of only a handful of crimes dealt with at a federal rather than state level, on par with crimes against humanity and genocide.  

Those rules could also be extended to banks exposed to modern slavery through their financing activities, she tells GTR. “We definitely support companies, including banks, having to put in place much better measures to actually track what they’re doing, where they’re lending to, and undertaking proper due diligence in that regard.”