The growing fight over the China FTA is sending the usual suspects into their usual camps and once again reason is the victim. At the loon pond the fervor is bubbling over:
Two of Australia’s top mining leaders have condemned the union movement’s campaign against the China-Australia free-trade agreement, warning that it is potentially xenophobic and risks the nation’s reputation.
Fortescue Metals chief executive Nev Power said that the advertising campaign against the agreement, being led by the Construction Forestry Mining and Energy Union, could damage Australia’s ability to attract foreign investment and overseas workers.
Roy Hill Holdings chief executive Barry Fitzgerald said the West Australian mining project was reliant on 457 visas and any move to restrict the number of workers as a result of the China deal would be disastrous.
Oh balls. 457s are a separate issue. This debate is about whether or not incoming Chinese investment should tap the local labour market first. That is a no-brainer for public policy. If Aussies are unwilling to take the jobs then by all means import the labour on 457s.
The problem is that the FTA does not ensure labour market testing. Joanna Howe, a Senior Lecturer at the University of Adelaide Law School and an expert in temporary labour migration, revealed that ChAFTA provides only minimal protections for local workers:
…the interpretation of what constitutes sufficient labour market testing is entirely left up to the department. This can be weakly interpreted by the department so that Chinese companies do not have to properly and rigorously test the local labour market in order to access Chinese workers…
Moreover, the protection afforded to local workers is contained in policy rather than law, as the requirements around the nature, type and duration of labour market testing is up to the department. These can be whittled away at any time so that the ability of these requirements to protect local workers’ preferential access to jobs becomes virtually meaningless.
Moreover, Ms Howe argued convincingly that the “Investment Facilitation Arrangements” (IFAs) included in ChAFTA are likely to erode worker’s rights:
The worker’s right to remain in Australia is wholly contingent upon the employer’s continuing demand for their labour. Withdrawal of support from the employer-sponsor may mean cancellation of the visa. This threat, actual or perceived, may induce an IFA worker to accept any degree of substandard working conditions and creates a strong disincentive for these workers to voice concerns for fear of being sent home.
…IFA workers can have lower English skills than under the 457 visa, which will hamper their ability to understand their rights or to complain about their violation. Lower English skills also have concerning implications for workplace safety…
IFA workers will [also] be unlikely to complain about being paid below the Australian minimum wage because whatever they are earning here is still likely to be more than what they would receive back in China. This provides an even stronger disincentive for IFA workers to bring to light the fact of their exploitation. Without inside informants, it is highly unlikely that the authorities will uncover it.
A Fact Check published recently at The Conversation written by Ms Howe and Stuart Rosewarne, Associate Professor at the University of Sydney also debunked ChAFTA:
As part of the agreement, China and Australia have signed a Memorandum of Understanding(MOU) on the topic of an “Investment Facilitation Arrangement” (IFA).The IFA allows a project company registered in Australia but with 50% Chinese ownership to bring in Chinese workers for a proposed infrastructure development project. The development must be projected to involve capital expenditure of A$150 million over its term.
There is no requirement under the MOU for labour market testing. This means the project company will not need to prove that they are unable to source Australians to work on the project. There is no requirement to prove that there is a skill shortage or that the project company has had recruitment difficulties in enticing Australian workers. (This is different to the 457 visa programme, where employers are supposed to show they have tried and failed to find Australian workers for jobs, before hiring skilled foreign workers.)…
The MOU allows Chinese workers to be brought into Australia to work on the project, so long as the project is related to infrastructure development within the food and agribusiness; resources and energy; transport; telecommunications; power supply and generation; environment; or tourism sectors…
Whilst it is true that Chinese workers will need to be employed in compliance with Australian labour laws, the MOU allows “concessions” to be made with regards to the required standards for the CSOL [ Consolidated Sponsored Occupations List], English language ability and the TSMIT [ Temporary Skilled Migration Income Threshold, currently set at $53,900].
This means that the project company can negotiate via a private contract with the Department of Immigration to import Chinese workers to work on the project in lower skilled occupations…
Even more concerning, is the fact that Chinese businesses can negotiate “concessions” with the Department of Immigration and that these will be stipulated as a term of a private contract between the two parties and not be on the public record. This allows the Executive arm of government enormous discretion in the making of these arrangements, with limited opportunity for transparency and public accountability…
Verdict
Ms Kearney [President of the ACTU] is correct that Australian workers can be excluded from labour market opportunities through ChAFTA. It is not technically correct to say that “workers from China can come under temporary work visas just about in any category and will not be subject to labour market testing”, although the breadth of industries permitted under the ChAFTA is extensive. Ms Kearney is correct that the ChAFTA has the potential for Chinese workers to be permitted into Australia with lower level English and lower skills than under the 457 visa programme…
The Investment Facilitation Arrangement could see a project being wholly staffed by Temporary Skilled Chinese migrant workers – and, yes, there is no labour market testing requirement.
As discussed above, this trade allows removal of some of the checks and balances that frame the 457 visa, which themselves are being subject to review.
A second Fact Check, published at The Conversation more recently and written by Associate Professor Rosewarne and Ray Markey, Director of the Centre for Workforce Futures at Macquarie University, also warned that workers could be paid less under the ChAFTA:
While the very general conditions stipulated in clause 2(e) could be argued to specify some minimum, albeit vague, employment conditions, Clause 5 of the MOU provides the scope for the circumvention of standards and rates of remuneration set through enterprise agreements. Clause 5 reads:
“1. The project company may be asked to provide additional information by DIBP in respect of its requests for concessions in the above areas. Other than the areas referred to in paragraphs 4(a) through 4(d), the grant of visas will be subject to meeting all other Australian nomination and visa requirements.”
So the MOU expressly opens up the opportunity for the project company to request “concessions” with respect to the employment standards designated in clause 2(e)…
Verdict
Michael O’Connor [CFMEU] is correct in that there is no black-and-white statement in the MOU that stipulates that foreign workers working side by side with an Australian worker shall unconditionally receive the same conditions and pay.
Clause 2(e) of the MOU does say that Chinese firms operating in Australia must agree to“comply with all Australian laws and regulations, including applicable Australian workplace law, work safety law and relevant Australian licensing, regulation and certification standards.”
However, Clause 5 opens the door to removing those protections through negotiated “concessions”…
So, according to the actual experts, ChAFTA could see “a project being wholly staffed by Temporary Skilled Chinese migrant workers” with “no labour market testing requirement”.
MB agrees that Australian labour should carry its share of the burden in deflating input costs to improve national competitiveness after the mining and property bubble years, but doing it via the backdoor admission of indentured slaves is not the way to do it.
The problem for ChAFTA is not union resistance but that the Abbottalypse agreed to this framework for the agreement at all, having put artificial deadlines on the negotiations so that he could wave around his piece of paper, without any independent analysis to support it or to convince the public, sowing the seeds of conflict.
