JOHN MENADUE.   Free Trade Agreements. The Abbott and Turnbull Governments were told but wouldn’t listen. They went further and attacked those who expressed concerns.

Jun 10, 2016

The ink was hardly dry on the China-Australia Free Trade Agreement (ChAFTA) before we learned about labour market exploitation under the agreement.

In the SMH on 4 June 2016, Adele Ferguson and Sarah Danckert revealed how the ChAFTA permits exploitation. The article was headed ‘ChAFTA has opened the door to unqualified workers’. See link.

The Australian company involved in this story, and the Chinese supplier were not cheating in what they were doing. They were doing exactly what ChAFTA allows them to do with the subclass 400 visa. Under this visa category temporary workers were brought in by the Chinese installer for short term specialist and non-ongoing work for three to six months. This small group of Chinese workers is likely to the harbingers of what is to come,

Working conditions and standards will be eroded and as with 457 visas there is no limit on the number of 400 visas that may be issued. In 2013-14, official data shows 33,000 workers from all countries came to Australia on 400 visas to do ‘highly specialised work’ and 8,000 stayed for two months or more.

The ACTU and the CFMEU both warned about their concerns over the ChAFTA, but they were derided. Malcolm Turnbull accused the trade union movement and the ALP of ‘extreme scaremongering’ over the agreement. Andrew Robb, the minister responsible for the agreement, accused the ALP of ‘xenophobic racist attitudes’.

We have learned a great deal from the seven pioneering Chinese workers who came to Australia earlier this year using the ChAFTA subclass 400 visa to work in Melbourne to install a car park stacker from China.

  • There was no labour market testing (LMT) to ascertain if suitable Australian labour was available.
  • The invitation letter from an Australian company to the Chinese supplier said ‘Nobody else in Australia could do this work’. The Chinese company said ‘These visas were granted (by the Australian Government) due to the high level of the technology and there was no requirement to include details of wages paid on the visa applications’. (Australian workers contacted by the SMH claim that suitable labour was available in Australia. An Australian worker said it ‘is ridiculous. A lot of the work is welding.’)
  • Two days before they came to Australia, the non-English speaking Chinese workers were granted ‘work construction industry’ certificates or ‘white cards’. The examinations were online in English with answers given to the Chinese workers in advance of the test.
  • The Chinese workers were paid between $US70 to $US75 per day. The going rate for a lift industry worker is $42 per hour for comparable work.
  • The Chinese workers were not given pay slips, paid penalty rates or paid super, despite working six days a week. They were not covered by WorkCover for any workplace injury.
  • They were paid by the Chinese company, the money going into bank accounts in China.

Chinese workers with limited or no English and described as ‘installers and servicers’ can work in any occupation. The only visa requirement is that their work must be ‘highly specialized’, but that is not defined.

Commenting on these arrangements, Joanna Howe, a senior lecturer in Law at Adelaide University, said:

  • ‘The ChAFTA workers are required to be employed in accordance with Australian law, but there are few checks and balances.
  • ChAFTA does not require LMT for these workers and there is no proper mechanism for checking.
  • All the 400 visa holders usually have to do is to provide a letter from their Chinese employer to the Australian consulate attesting that the visa holder will not cause any adverse affect for Australian workers. (Others say it is not clear that even this is required under ChAFTA since it waives LMT.)
  • The Department of Immigration and Border Protection has a processing time for these sub class 400 visas of five days, but they are generally approved within 24 to 48 hours.
  • DIBP does not have the resources or the inclination to properly check the visa applications.

In this blog, Bob Kinnaird pointed to the high risk that the ChAFTA and similar FTAs presented. Bob Kinnaird The high price of Labor capitulation on ChAFTA.

In its submission to the Parliamentary enquiry into ChAFTA,  the CFMEU drew attention to the risks in the ChAFTA. It said :

The two most remarkable features of ChAFTA provisions are firstly that the right of Chinese “installers and servicers” to work in Australia is determined solely by the terms of a commercial contract between the Chinese company supplying machinery or equipment, and the purchasing entity, which could be a Chinese, Australian or other company. If that contract specifies that installation and/or servicing is “a condition of purchase of the machinery or equipment” the Chinese workers automatically have the right to work in Australia . 

Secondly, the ChAFTA obligation to “abide by Australian workplace standards and conditions” is imposed on the Chinese national working as an “installer and servicer”, not on the Australian based employer or entity for which the installation or servicing is being done, nor the supplying company which will presumably be paying the wages of these Chinese workers. 

In this blog I have outlined how the government has consistently and grossly exaggerated the benefits of several Free Trade Agreements that have been negotiated. The Investor State Dispute Settlement clauses allow foreign businesses, like tobacco companies, to sue the Australian Government in foreign jurisdictions. Malcolm Turnbull has even gone so far as to say that these FTA’s are one of the five pillars of his economic plan for jobs and growth!

Over the last few decades Australia has reduced its levels of tariff and protection. As a result, Australia no longer has much leverage to liberalise access to our market in return for access to the Chinese or other markets. To cover for this loss of leverage, the Coalition has bargained away the conditions for Australian workers in return for our access to agricultural markets overseas.

These FTA’s are being used to undermine Australian labour standards and they will be used as a precedent in other FTAs particularly with India.

The ACTU and the CFMEU have legitimate concerns. They were correct in drawing those concerns to the attention of the government. Their concerns have now been vindicated by what the SMH has outlined.

There is no suggestion that Australian or Chinese companies are cheating. They are doing what these FTAs allow.

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