Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

I want to acknowledge and congratulate the Australian Council of Trade Unions, the Australian Manufacturing Workers Union, the Construction, Forestry, Mining and Energy Union and the AFTINET for the work that they have done concerning the Korea bilateral trade agreement. I want to make it absolutely clear to the House that I share their concerns about the investor-state dispute settlement provision, about the labour market testing and work visa arrangements, about the copyright and intellectual property provisions and about the impact of this agreement on manufacturing.

I am very concerned about the labour market testing arrangements. The Korea bilateral trade agreement will allow Korean nationals to perform certain categories of work in Australia without any requirement for labour market testing to assess whether the work can be performed by Australian residents. Labor is opposed to the removal of labour market testing in bilateral and multilateral trade agreements. We believe that the government should require employers to show that there are skill shortages through labour market testing if they wish to utilise this treaty's provisions on labour mobility.

Let me be clear. At a time when we have over 750,000 Australians out of work, double digit youth unemployment and rising long-term unemployment, I think our first obligation is to employ Australian workers. It is my strong view that the number of people in Australia on temporary visas which give them work rights—which is over one million people—is way too high. The government claims that there are safeguards in place against the abuse of the various temporary migrant worker programs. But a report from Richard Baker and Nick McKenzie in The Age gives the game away; it says as many as nine in 10 skilled migrant visas may be fraudulent. There was a Somali people smuggling cell in Melbourne linked to a terrorist suspect but the investigation into that ceased due to lack of resources. Meaningful investigation and prosecution activity concerning migration fraud in the Melbourne office has effectively ceased. A 2010 investigation concluded that around 90 per cent or 40,000 visa applications in the general skilled migration program lodged per year for the previous three years were suspect. A 2009 investigation concluded that the student visa program was failing, the general skilled migration program was failing and that the falsifying of qualifications was prolific.

The key problem is that since 2004 the migration program has skyrocketed but the resources of the department have not increased to keep pace with that. The permanent migration program has gone up from 100,000 to 240,000 and we have over one million people in Australia on temporary visas who have work rights. It is simply beyond the capacity of the department to check the validity of the claims people are making about their qualifications and work experience. It is apparently even beyond the capacity of the department to close down passport swapping scams. This is not Operation Sovereign Borders; it is 'Operation Open Borders'.

I have been sent a statement by a young Irish worker about his experiences as a working holiday maker and 457 visa worker in Australia which should give us all real cause for concern about whether the protections and safeguards against exploitation of migrant workers such as those in this treaty are worth the paper they are written on. Conan Doyle is 24 years of age. He came to Sydney on a working holiday visa in 2010, when he was 20. He did not have any formal trade qualifications. He did labouring jobs, and in early 2011 he was asked by a company called Wilson Pacific if it could set up an ABN number—and he did so.

Later in 2011 he met other Irish temporary workers who introduced him to the company Lis-Con, who got him to work on the airport link tunnel. Andrew Bennett, the HR person for Lis-Con, asked Mr Doyle if he had an ABN and, when Mr Doyle told him that he did, he said words to the effect that that was good because he would not have to set one up. Mr Doyle started with Lis-Con as an ABN worker. During his time working for Lis-Con on an ABN he was paid by a number of different companies. He thought this was because it was a condition of the working holiday visa that you cannot work for a single employer for more than six months. Mr Doyle believes—and I agree—that Lis-Con paid him through separate companies to get around this condition. He adds that a lot of Lis-Con's employees are young Irish men on working holiday visas and their pay was also moved from one company to another. This looks to me suspiciously like visa fraud. I ask that the government investigate whether Lis-Con is engaged in fraud in its payment arrangements for people on working holiday visas.

But that was not their only dodgy dealing. Mr Doyle said that, in 2011, Mr Willie Dolan, from Lis-Con, offered to arrange for Lis-Con to sponsor him so that he could get work on a 457 visa. Mr Doyle states that Mr Dolan said words to the effect of 'do up your resume to say you've got four years experience as a carpenter and get someone in Ireland to vouch for you and say that you've worked for a carpenter'. This was in fact not true. After the initial conversation, Mr Dolan put Mr Doyle in contact with a migration agent named Judy Wells at Judith Wells and Associates in Currumbin, Queensland. Mr Doyle had a number of conversations with Ms Wells by phone and paid her $4,000. He says he was under severe stress and strain at this time and felt he had to lie to get his visa. Mr Doyle said that, from speaking to other workers, he knew that Willie Dolan sent all the workers that he sponsored to Judy Wells for their visa applications. Most of these guys told him that they had also lied about their work experience in Ireland.

Mr Doyle had his 457 visa granted in December 2012. Lis-Con then told him to open a new bank account into which his pay would now be paid. One wonders why Lis-Con wanted him to do that. Mr Doyle thinks it was to make it appear as if Mr Doyle was a new employee with a 457 visa. He also says that Lis-Con used ABN numbers for its workers rather than tax file numbers to avoid tax and superannuation payments. He says workers on ABNs were not entitled to medical treatment and, if an accident happened at work, they would secretly remove you from the site so your injury was not recorded, and you had to pay your medical fees and loss of income yourself.

Given these revelations, I urge the government to investigate the bona fides of the visas issued to Lis-Con workers. It is cautionary tales like this that make me sceptical about the capacity of the government to ensure that the open-ended visa arrangements we are entering into with Korea can be satisfactorily enforced. And I agree with the concerns of the CFMEU that this treaty grants labour-market-exempt status to all Korean nationals and residents covered by this treaty. I regard it as critical that we ensure that Australian workers are not disadvantaged through diminished labour-market-testing provisions.

I am also concerned about the impact on proper labour rights by a provision in the KAFTA text Annex 3B, which has been drawn to my attention by Dr Patricia Ranald of the Australian Fair Trade and Investment Network, or AFTINET. There is a sentence which says that the Kaesong industrial complex, located in North Korea, shall be identified by the joint Committee on Outward Processing Zones on the Korean Peninsula as one of the geographic areas that may be designated as outward processing zones. Now, this sentence was not drawn to the attention of the Treaties Committee by either the department or any of the witnesses and submissions, which is unfortunate because we then did not have the opportunity to tease out its significance. But it is clear enough that we are agreeing to discuss giving zero-tariff access not just to products from South Korea but to products from North Korea. I am told that there are 120 South Korean companies and 40,000 North Korean workers in the complex referred to. It certainly raises the question as to whether forced labour, or prison labour, may be involved. North Korea is notorious for having no basic labour rights. It is Australian Labor Party policy to support enforceable labour rights in trade agreements, and we are opposed to giving preferential access to products produced by forced labour, or prison labour, for obvious reasons.

Let me turn now to the investor-state dispute settlement provision. Labor does not believe that the Korean bilateral trade agreement should have included investor-state dispute settlement provisions, which give Korean firms greater legal rights than Australian firms. In government, we will continue to oppose inclusion of these ISDS provisions in trade agreements and we would seek to negotiate with Korea for the ISDS provisions to be removed. These investor-state dispute settlement provisions elevate the interests of corporations above those of the public and their democratically elected governments. They are fundamentally undemocratic.

The government says that the investor-state dispute mechanism contained safeguards, but there is no guarantee that the safeguards are adequate. We are agreeing to submit government actions to ISDS arbitration panels. These panels are made up of investment law experts, who have a past and a future in representing investor complainants. ISDS panellists can be an advocate one month and an arbitrator the next. Unlike permanently employed independent judges, arbitrators are paid by the hour, creating an incentive for cases to drag on. Most cases take from three to five years to resolve. ISDS has no system of precedents or appeals, and one arbitrator from Spain, Juan Fernandez-Armesto, has observed, and I quote:

When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.

The more you think about it, the more amazing it is. The Treaties Committee was informed that, as of April this year, there were 568 known investor-state dispute settlement cases brought under treaties. Two hundred and seventy-four cases have been concluded. Approximately 43 per cent were decided in favour of the state. Thirty-one per cent were decided in favour of the investor. Approximately 26 per cent of cases were settled. There is every chance that these cases involve taxpayers handing over money to corporations, and nearly 300 cases remain unresolved.

Investor-state dispute settlement claims have been launched against governments all over the world. In 2011, the German government settled an ISDS case with the Swedish energy company Vattenfall, which had launched a €1.4 billion claim against the government for strict restrictions that were imposed on a coal-fired power plant it was planning to build on the banks of the River Elbe. To settle the case, the German government had to agree to withdraw the restrictions. ABC radio's Background Briefing reports that now Germany is facing another investor-state dispute settlement claim from the same energy company, this time against the decision to wind back nuclear power after the Fukushima nuclear disaster. There have been dozens of ISDS claims launched under the NAFTA, the North American Free Trade Agreement. Background Briefing reports that Canada has been sued nearly 20 times. It has lost or settled seven times, paying American corporations at least US$158 million in compensation. One case was about a fuel additive called MMT, which the Canadian government decided to ban after it concluded that it could be a threat to human health and the environment. After being sued by Ethyl, the US corporation that manufactured MMT, the Canadian government settled the case for US$13 million. To settle, it had to agree to overturn the ban and, to add insult to injury, to publish a statement declaring MMT to be safe.

We do not need, and are crazy to have, such a handbrake on government. If the reason for establishing investor-state dispute settlement is to respond to failures in national judicial systems that do not provide independent justice or enforce the protection of private property, then the right response is to fix those shortcomings rather than allow foreign investors to seek justice elsewhere. These ad hoc arbitration tribunals are not a legitimate alternative to national courts.

There are numerous other examples of the kinds of problems that this approach has generated. The House will be aware that the Philip Morris tobacco company is using investor-state dispute settlement in an obscure Hong Kong investment agreement to sue the Australian government over our plain packaging law despite the fact that the High Court found they were not entitled to compensation. The US Lone Pine mining company is using ISDS in the North American Free Trade Agreement to sue the Canadian Quebec government for $250 million because it responded to community concerns and conducted an environment review of shale gas mining. So this potentially could apply to state governments here in Australia. Not having an investor-state dispute settlement clause did not stop a Labor government negotiating a trade agreement with Malaysia, it did not stop a Liberal government from entering one with Japan, and it should not have been allowed through the door here.

I also note, in closing, that Labor also has concerns about the treaty's provisions on intellectual property and that the opposition will determine its position concerning any changes to the Copyright Act when the details of that are made public.

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