A Future Made in Australia: Does the PMs industrial agenda offer hope for labour and human rights?

Fiona David*

The PMs announcement of the Future Made in Australia Act (FMAA) offers hope for the future of green industry, manufacturing and jobs in Australia. But what hope does it offer for labour and human rights?

The Australian Prime Minister's announcement of plans to introduce a Future Made in Australia Act (FMAA) offers hope for anyone concerned about green industry and manufacturing in Australia. 

According to the Prime Minister's speech this week, the FMAA will bring together a package of new and existing initiatives to "boost investment, create jobs and seize the opportunities of a future made in Australia". Referencing the multi-billion dollar US Inflation Reduction Act, the FMAA will consolidate several industrial reform initiatives under one banner, including Hydrogen Headstart, Solar Sunshot and the National Reconstruction Fund.

From a human rights perspective, the focus on Australian-made solar is incredibly welcome. For too long, Australia (like every country) has sourced solar panels from parts of the world where modern slavery risk is high. While some buyers may have looked the other way, many are likely simply unaware of these issues. From my experience in the corporate world, even those companies that  have actively sought out "cleaner" alternatives face significant challenges due to the realities of geopolitics, global competition for scarce supply and significant price premiums.

Australian solar manufacturers can have a huge advantage in global markets but only if our products are truly green and clean. This will require Federal focus not just on manufacturing but also sourcing. As just one example, the risks of modern slavery in solar energy value chains are typically found right back in the source minerals, and their processing. Simply sourcing these same inputs into Australian-made solar would not fix the problem. We have high quality quartz (silica) deposits in Australia. But will the FMAA require Australian companies to get serious about sourcing clean supply for Australia's manufacturing?

More information on the Act will be coming in the budget but the PM does say this will be “guided by three principles”:

1. “We need to act and invest at scale.”

2. “We need to be more assertive in capitalising on our comparative advantages and building sovereign capability in areas of national interest.”

3. “We will continue to strengthen and invest in the foundations of economic success:

- Affordable and reliable clean energy

- A better and fairer education system

- Skilled workers, secure jobs, fair wages

- Modern infrastructure

- Shared ambition with business and private capital

- And a positive regulatory environment”

From a human rights perspective, the Prime Minister's focus on the strategic benefit to Australia of having fair wages is critical. Throughout Europe, various national laws and forthcoming regional rules are requiring EU businesses to check that workers in their supply chains are paid a "living wage". The concept of a living wage is pretty simple: it requires people to not only be paid but to be paid enough to actually cover the cost of living decently.  This is an issue on which we can and should compete. The focus on living wage reflects increasing recognition that we want, and I would say need, to live in a world where "value" means far more than simply a "cheap price". 

The Prime Ministers focus on creating a positive regulatory environment is key. Business cannot do the heavy lifting alone, nor can civil society. There is much the government can be doing to adjust policy levers.  So it is good news that in his speech, the PM said "We want to look at every measure that will make a positive difference." Here are some ideas.

1. Competition law reform to build a clear carve-out for B2B collaboration on sustainability, including human rights risk management efforts. The EU has a legal framework for this. Australia needs this. More on the specifics of green competition here.

2. Import restrictions on goods and services where there is a real likelihood these have relied on forced labour or slavery. The EU and US have laws to restrict these imports. Australia needs equivalent import restriction laws, if we are to avoid becoming a dumping ground for products that can no longer be sold in the EU and US markets because of labour concerns.

3. Financial incentives, directors duties and other policy mechanisms, to help price in the real cost of “cheap” exploitative labour practices overseas, that undercut Australian sourced minerals and materials, whether that is silicon, lithium, nickel. It is not fair or realistic to expect manufacturers that pay decent wages and maintain fair working conditions to compete with those who do not. 

Australia's political leaders have an incredible opportunity in the coming budget to drive major industrial transformation, in service of the energy transition. But we owe it to future generations to ensure that this transformation also drives positive social change, including greater opportunity for fair and decent work for all. 

*With thanks to Tahlia McDonald for research support. 

Sources:

Albanese, A. (2024) A future made in Australia, Prime Minister of Australia. Available at: https://www.pm.gov.au/media/future-made-australia (Accessed: 12 April 2024).