Senate report pushes for restrictions on imported goods produced by forced labour

CONCERNS for human rights have manifested themselves in many ways over the course of many years and led to a range of responses over that time, whether by unilateral national action or collective international action through such bodies as the United Nations Human Rights Council.

Those responses include action against the production or goods or provision of services using forced labour through international agreements such as the International Labour Organisation (ILO) Forced Labour Convention 1930 and related instruments such as the Abolition of Forced Labour Convention 1957 and the Protocol of 2014 to the Forced Labour Convention 1930.

Various countries have taken independent action against “forced labour” or “modern slavery” and it’s products at different times. For example, the United States has prohibited the importation of any goods manufactured wholly or in part by forced labour for many years under section 307 of the Tariff Act 1930 (US Tariff Act).  The US Tariff Act allows that if there is reasonable evidence that such goods are being imported, then the United States Customs and Border Protection Service (CBP) may issue a Withhold Release Order (WRO) either for a specific manufacturer, or an entire class of product from an entire region. Items subject to WRO will be seized by the CBP and either destroyed, re-exported or released if the importer submits evidence that they were not produced with forced labour. The United Kingdom has its own Modern Slavery Act and Australia also has regulation pursuant to its Criminal Code Act 1995 and the Modern Slavery Act 2018 (Modern Slavery Act). The Australian regime does not currently permit the issue of a WRO in relation to goods believed to be the product of forced labour and does not allow specific action to be taken against goods from a particular country or region.

The ILO estimates that more than 40 million people are trapped in a form of modern slavery with almost 24.9 million of those in forced labour.

In more recent times, there has been a focus on allegations of Uyghur forced labour in the Xinjiang Uyghur Autonomous Region. A number of countries (including Australia) have issued condemnations and specific action has been taken such as by the United States in the Uyghur Human Rights Policy Act 2020 (seeking to impose these economic sanctions on Chinese officials seen to be associated with human rights abuses). Further, in 2021 both Canada and the United Kingdom announced measures to address the risk of the produce of forced labour entering the supply chain.

The Uyghur issue has now come before the Australian Federal Parliament with the introduction of the Customs Amendment (Banning Goods Produced by Uyghur Forced Labour) Bill 2020 (Bill) and the recent release of a Report (Report) into the Bill by the Foreign Affairs, Defence and Trade Legislation Committee of the Australian Senate. Importantly, the Bill received bipartisan support.

The Bill seeks to amend the Customs Act 1901 (“Act”) to ban the importation of goods from Xinjiang in China as well as goods from other parts of China that are produced in whole or part by forced labour.

Following hearings, the Report was issued including 14 recommendations to be found here.

The first recommendation provides as follows:

“The Committee recommends that the Customs Act 1901 and/or other relevant legislation be amended to prohibit the import of any goods made wholly or in part with forced labour, regardless of geographic origin”.

The remainder of the recommendations provide for supporting action including allowing the Australian Border Force (ABF) to issue rebuttable presumptions for specific goods which would allow such goods to be stopped at the border. The recommendations also include a recommendation for additional funding for the ABF to conduct investigations in support of the provisions and to examine the role of emergent technologies in tracing the geographical origin of products or materials. This would also alongside existing import and export sanctions.

While the Federal Government has 30 days to consider its response to the Bill and the Report, it seems unlikely that the Federal Government would take any positive steps to pass the Bill or take any action in response to the recommendations in the Report in the immediate term. From this perspective, in a “whole of government” submission into the Bill, a number of agencies (including the ABF) said that they did not have adequate resources in place to be able to ban or control the importation of goods produced in such circumstances. That submission proposed deferring any action until the scheduled review of the Modern Slavery Act. There are also practical problems in identifying goods likely to come from forced labour given that information provided to the ABF in the Integrated Cargo System (ICS) is largely confidential, although the Report did include a further recommendation supporting the release of such information from the ICS.

Even should the Bill (or similar legislation) be adopted, a significant concern for those in industry is how the service providers in the industry (including freight forwarders and licenced customs brokers) would be able to verify whether relevant goods are the product in whole (or in part) of forced labour. Again, it seems an unreasonable imposition on service providers to expect that they would independently be aware of the origin of the relevant goods and the conditions in which they are produced. It would be even more unreasonable to impose penalties for being involved in the movement of such goods and failing to identify that the goods were the product of such forced labour. Whatever happens, it can only be hoped that any responsibility for service providers at the border is limited to liabilities only for knowingly or recklessly dealing with goods which were the product of forced labour (including those dealings with goods listed by the ABF and other government agencies) to have been the product of forced labour. Otherwise, all responsibility should fall to the importer of the goods.

It will also be interesting to see how such restrictions and prohibitions will interact with the terms of various Free Trade Agreements and whether such future Agreements will reserve rights to impose such restrictions and prohibitions.

Otherwise, we look forward with interest whether the relevant general prohibitions on the products of forced labour or of the Uyghur in the Xinjiang Province will drive the creation of new import prohibitions along the lines of those adopted in the United States or to be adopted by the United Kingdom and Canada.

As always, we will keep you informed of developments.