Nick Xenophon (SA, Independent) Share this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to table an explanatory memorandum relating to the bill.

Leave granted.

I table an explanatory memorandum and I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Australia is a small open economy and there is no question that we benefit from free trade.

But free trade must not be ‘free for all’ trade.

It is crucial that we do as much as we can to reasonably assist and protect Australian industry, Australian manufacturers and Australian jobs.

Dumping occurs when overseas companies sell products in a country below the cost it sells it for in its own country, making it near impossible for Australian companies to compete.

Under Part XVB of the Customs Act, dumping duties can be applied against the overseas company.

These dumping duties are supposed to offset the effects of injury; however I am increasingly concerned that the current framework does not adequately protect and does not fairly act in favour of Australian manufacturers.

In fact, the burden, the cost and the process appears to be skewed very much in favour of overseas importers.

This Bill seeks to correct this and put greater focus on the unfair impact on Australian manufacturers.

In this way, we can protect Australian companies and local jobs.

I first began to campaign on this issue of anti-dumping when I was contacted in early 2010 by workers at Kimberly-Clark, a paper and tissue manufacturer with operations in the South East of South Australia.

Kimberly-Clark was facing an uphill battle trying to fight a reversal of dumping duties on tissue products being imported from China and Indonesia.

In 2008, the Government imposed dumping duties on the Chinese and Indonesian tissue products after investigations found that Chinese products were being sold at 2 to 25 percent below the cost in its domestic market, while Indonesian toilet paper was found to have been dumped at 33 to 45 percent below value.

However, this decision was overruled in 2009 following a review by the Trade Measures Branch of Customs, which determined that there was “no material injury” to Australian manufacturing as a result of these imports.

By removing these dumping duties, the Government basically said to Kimberley-Clark – ‘Go on, fend for yourself’, even though they knew there was no way they could compete with the dumped products.

In February 2011, Kimberly-Clark announced it was closing two of its four tissue machines and selling a pulp mill in and near the regional town of Millicent, costing around 235 jobs.

And for every job that’s directly lost, more jobs are lost as well, and the impact on the community of Millicent, and indeed on the entire state of South Australia will be significant.

Now it’s fair to say that other factors were at play in this case however there is no doubt in my mind that Kimberley-Clark could have withstood competitive pressures if the Federal Government had stood up for Aussie manufacturing and stopped the dumping of cheap paper imports into the country.

National Secretary of the Australian Workers Union, Paul Howes, as part of the launch of the AWU’s Don’t Dump on Australia campaign in February 2011, to raise public awareness about the impact of dumping on jobs, said: “Unfortunately the evidence is clear that our laws and regulations on free trade are simply weak – and other nations take advantage of our weakness”.

Those sentiments have been supported by the National Secretary of the CFMEU, Michael O’Connor, who has been a long-time champion for his members on this issue.

And I fear that this is very much the case. In fact, it’s been put to me that Australia is seen as an easy target, a mug, when it comes to goods being dumped.

And, while there are international rules around dumping, under the World Trade Organization’s Anti-Dumping Agreement (Agreement on Implementation of Article VI (Anti-dumping)) which was finalised during the Uruguay Round in 1994 and sets up a framework for how countries can implement anti-dumping duties, the appropriateness and application of these rules needs to be seriously re-considered.

Indeed, it should not be a case of – ‘They’re the rules, no questions asked’, rather as circumstances change and situations emerge the system needs to adapt in the interest of local industry and the Australian Parliament needs to act in the interest of Australian industry and Australian jobs.

This Bill is an important step in giving greater opportunities of redress to Australian manufacturers when it comes to fighting cases of dumping.

This Bill seeks to redress the flaws in the current framework and strengthen the provisions under the Act that will give greater support to Australian manufacturers during the application and investigation processes and in any review of decisions by the Trade Measures Review Officer or the Minister.

Some of the key amendments under this Bill are:

Reversing the onus of proof

Item 12 of the Bill inserts a provision for, where the CEO does not reject an application, the importer of the imported goods which are the subject of the application, bears the onus of proving that the imported goods have not been dumped or subsidised for export into Australia.

This amendment is to try to assist Australian companies who currently face an extreme financial burden to try to prove goods are being dumped in Australia.

Indeed, some companies have to spend hundreds of thousands of dollars investigating the practices of overseas manufacturers who they believe to be dumping goods.

Under this amendment, once Customs receives an application, Customs will be able to approach the overseas manufacturer and importer and the onus will be on them to prove they are not dumping.

And any material lack of cooperation on the part of the importer of the imported goods would lead to a presumption that the imported goods are, in fact, dumped goods.

Inserting a presumption of dumping

Items 3, 4 and 7 of the Bill insert a presumption that, where material injury has been proven and dumping has been proven, the material injury is the result of the dumping.

Currently, other factors are able to be attributed as the cause of the material injury and dumping duties are not applied, even though dumping has been proven.

This was the case with Kimberly-Clark.

Chinese products were found to have been dumped at 2 to 25 percent below the cost in its domestic market, and Indonesian toilet paper was found to have been dumped at 33 to 45 percent below value, and yet the Review Officer attributed material injury against Kimberly-Clark to other factors.

But I believe the impact of the dumped goods on Kimberly-Clark’s bottom line meant that it was unable to withstand other competitive pressures.

This amendment will ensure that the overall impact of dumping on a company is taken into account and where material injury is proven and dumping is proven, that the two are considered to be linked.

Allowing new or updated information that reasonably could not have been provided earlier

One of the issues which was repeatedly raised in my discussions with manufacturers, unions and industry representatives was the inability for new or updated information to be provided at various stages.

Several items in this Bill seek to address this and allow new or updated information that reasonably could not have been provided earlier to be submitted during the application, investigation and review processes.

Allowing evidence to be provided from as recently as 90 days

The Bill also allows applicants to provide evidence from as recently as 90 days prior to the application being submitted.

Manufacturers have advised me that being required to compile evidence over a year or more before they can make an application for dumping duties means that injury is allowed to be caused over a longer period of time than necessary.

Allowing preliminary affirmative decisions to be applied once an investigation has been initiated

Preliminary affirmative decisions enable securities to be applied on imported goods being investigated for dumping or while decisions are being reviewed.

Currently, Customs cannot make a preliminary affirmative decision until 60 days after an investigation has been initiated.

Under this amendment, preliminary affirmative decisions can be initiated as soon as an investigation has been initiated and during a review of any decision.

This is aimed at protecting Australian manufacturers from injury while an investigation or review is being conducted as the process can be quite lengthy.

Increasing consultation with industry experts as part of the process

The Bill also inserts provisions for consultation with industry experts as part of the investigation and review processes.

A key concern that has been highlighted is the absence of relevant industry expertise to the application, investigation or review being conducted.

Referring decisions to the Administrative Appeals Tribunal

Another key amendment is enabling decisions to be referred to the Administrative Appeals Tribunal for appeal.

Currently, Australian companies only have the recourse of going to the Federal Court which is extremely costly and lengthy.

All of these amendments are aimed at improving and strengthening the current anti-dumping framework so that Australian companies are not the target of unfair practices.

The current system simply isn’t working.

In the development of this Bill I have spoken with industry experts, trade union representatives, manufacturers and employees who face losing their jobs as a result of dumping.

I thank them all for their assistance and I hope that this Bill will provide Australian industry with the support they need to compete against international manufacturers who seek to undermine our markets.

I look forward to this Bill being subject to a Senate Committee inquiry for robust analysis and discussion, and following that necessary process, I look forward to these reforms being introduced which are necessary to put an end to the damage to industry and jobs caused by the dumping of goods in Australia.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.