How a Future Made in Australia can help end modern slavery

Having the Future Made in Australia (FMA) Bill introduced in Parliament is a big step forward for the green industry, manufacturing and generating new jobs in Australia. 

However, when it comes to labour and human rights in the energy transition, the risks we face are not only found in workplaces in Australia. They are found in workplaces globally that are part of our supply chains.

With this in mind, it is vital that in making our plans to build a “stronger, cleaner economy” through manufacturing in Australia, we take account of the serious human rights risks that are embedded in global supply chains.

Anyone who is concerned about the green industry and manufacturing in Australia will no doubt feel optimistic about a brighter tomorrow where renewable energy becomes commonplace. Inspired by the multi-billion dollar US Inflation Reduction Act, the FMA package of new and existing initiatives promises to “boost investment, create jobs and seize the opportunities of a future made in Australia”. It will do so by consolidating 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 the right one. This move could unlock a future where Australia is part of globally diversified supply chains for solar panels, and is therefore less dependent on solar panels sourced from parts of the world where modern slavery risk is high.

While some consumers of solar panels may have looked the other way when confronted with the reality of modern slavery, many more are simply unaware of the issues embedded deeply without renewable energy supply chains. In my experience of the corporate world, even companies that have actively sought out “cleaner” alternatives face significant challenges in obtaining the perfect solution due to the harsh realities of geopolitics, global competition for scarce resources, and significant price premiums.

Australian solar manufacturers can have a huge advantage in global markets, but only if our products are genuinely green and clean. To get to that point, the federal government will need to focus not just on manufacturing but also sourcing, and driving both supply and demand of local content. 

One powerful example is the way modern slavery risk can be deeply buried in solar energy value chains, right back at the source where minerals are obtained and processed. Continuing to rely on the same imported source materials as inputs into Australian-made solar panels would not fix the problem.

We have high-quality quartz (silica) deposits in Australia that can be leveraged for polysilicon production. But recent research has identified critical steps the Australian government will need to take to unlock competitiveness of Australia’s polysilicon production, including a focus on policies driving demand for local content. 

The FMA bill seeks to establish a National Interest Framework to support consideration of decision-making related to significant public investment that unlocks private investment, and requires that FMA funding decisions consider “broad community benefits” including the creation of secure jobs that are well paid and have good conditions.

From a human rights perspective, the prime minister’s focus on the community benefit of fair wages in Australia is critical. Throughout Europe, various national laws and forthcoming regional rules are already 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”.

But the labour standards behind anything we make here will only be as strong as the labour standards involved in any inputs, including those sourced from global supply chains. For this reason, I would advocate for a small but important stretch to require that funding under the FMA initiative be dependent not just on community benefit, but also on ethical sourcing standards being met, including checks and balances to safeguard against modern slavery. 

When it comes to addressing modern slavery risk in global supply chains, business has a key role to play but it cannot fix these issues on its own. There is much the government can do to adjust policy levers to achieve better outcomes for exploited and vulnerable persons. 

The PM said when announcing the Future Made in Australia initiative that he would be open to looking at “every measure that will make a positive difference”. With the practical challenges of getting to grips with modern slavery risk in the supply chains that will sit behind renewables “made in Australia”, here are a few more suggestions:

Reform competition law to clearly carve out a space for B2B collaboration on sustainability, including human rights risk management efforts. The EU has a legal framework that enables this. Australia needs to follow suit. Place import restrictions on goods and services where there is a real likelihood they have relied on forced labour or slavery. The EU and US have laws to restrict these imports and again 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. Put in place 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 or 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 to drive major industrial transformation in service of the transition to clean energy. 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. The bottom line is that clean energy must never come at the cost of human rights.

The Future Made in Australia Act is an opportunity to make modern slavery history, and one we can’t afford to miss. 

READ MORE:

Modern slavery reform needs more bite to be effective