Fresh trade tensions with the United States have reignited scrutiny of Australia’s Modern Slavery Act, with experts warning the nation risks becoming a “dumping ground” for goods rejected by other countries.
The ongoing debate intensified after the United States proposed new tariffs on imports from several countries, including Australia, arguing that insufficient action against forced labour imports is creating unfair trading conditions.
Using Section 301 of the Trade Act of 1974, the US Trade Representative investigated 60 trading partners, evaluating their legal frameworks on forced labour.
Australia was among 54 economies found to have no forced labour import ban, placing it alongside China, Vietnam, Japan, the United Kingdom and New Zealand.
US Trade Representative Jamieson Greer alleged that Australia’s failure to impose and enforce a forced labour import prohibition was “unacceptable”, with the proposed measures lifting tariffs on Australian goods to 12.5 percent.
This places Australia in the same bracket as 44 other countries, including China and India, while 15 countries, including Ecuador, Indonesia, Malaysia and the European Union, face a lower proposed rate of 10 percent, reflecting specific enforcement failures rather than the absence of a ban.
The tariff proposal has been widely criticised by the Federal Government, with Prime Minister Anthony Albanese calling it “unjustified” and claiming Australia has “robust, comprehensive and world-leading legislation addressing forced labour and modern slavery”.
It has also drawn attention to a longstanding concern that Australia remains one of the few advanced economies without a ban on imports produced using forced labour.
Professor Justine Nolan, Director of the Australian Human Rights Institute at UNSW Sydney, told Sky News Australia that the move had traces of “pure trade politics”, but could not be dismissed entirely.
“Perhaps the motivation here isn’t exactly pure, and…I think that the trade laws are being arguably used in a cynical sort of cover way in relation to this,” she said.
“But it does put a spotlight on what we can do, and we know we can do more. What (the US is) really looking for is to have something similar to what they’ve got, which is a forced labour import ban.
“What (a ban) would do is it would mean that goods that are tainted with forced labour, that are coming through supply chains, coming into Australia, this would stop those at the border.
“The US has a law like this, the EU is phasing in a law like this, other countries like Mexico, Canada, are also bringing in these types of laws.
“What we have at the moment with Australia without that law is we’re really at risk of being a dumping ground for goods that are being made on the backs of slaves and they’re coming into Australia.”
Meanwhile, RMIT University has warned that the US tariffs could create a “conflict of laws” for Australian businesses.
“This tariff proposal means that transparency without border-level enforcement will carry significant commercial consequences,” said Professor Shelley Marshall, Deputy Dean (Research and Innovation) at the School of Law at RMIT University.
“However, if Australia introduces a border-level import ban to mitigate the 12.5 percent US tariff, domestic entities will face contradictory legal mandates from their primary security ally, the US, and their principal trading partner, China.
“This means that Australian businesses could face a direct conflict of laws.
“Implementing a strict border ban to avoid US tariffs risks triggering Chinese counter-sanctions, including local contract lawsuits, asset freezes or executive exit bans because China has recently passed Supply Chain Security and Counter-Extraterritoriality Regulations to counter EU and US forced labour trade bans and human rights due diligence laws.
“Navigating this environment requires a highly calculated strategy.”
Currently, Australia’s Modern Slavery Act requires large organisations to report on modern slavery risks in their operations and supply chains, but unlike other jurisdictions, it doesn’t ban imports made using forced labour.
While the Federal Government has committed to implementing recommendations from the 2023 review of the Modern Slavery Act, including stronger penalties and compliance measures, reforms have yet to fully materialise.
“We had world-leading legislation when we established it in 2018, but we’re eight years on from that now and other countries around the world have moved on,” Professor Nolan told Sky News Australia.
“The fact is that our current modern slavery law isn’t really fit for purpose. It doesn’t have any enforcements built into it. It’s essentially voluntary for many companies and it’s really loosely sort of quality control, if you like.
“I think it’s fair to say it’s a sort of a cynical move using trade law in this way, but in this case there’s some substance behind it, but it’s definitely more about trade than labour and about raising revenue.”
