Breaking the chain: The case for an Australian import ban on products made using forced labour

Ava Kalinauskas, Freya Phillips National Scholar, Y20 2025

Executive Summary

Australia imports an estimated AUD$25 billion annually in goods at risk of being produced using forced labour. This exposes Australian entities to governance and reputational risks, weakens domestic competitiveness, distorts global supply chains, and undermines Australia's international human rights obligations and commitment to the international rules-based order. The current voluntary corporate disclosure approach under the Modern Slavery Act 2018 has largely failed to drive meaningful change. As jurisdictions like the United States and European Union adopt stricter regulations banning imports of goods made using forced labour, Australian companies risk losing access to key markets without stronger enforcement mechanisms.

This policy paper recommends amending Australia’s Customs Act 1901 to prohibit the importation of goods produced in whole or in part by forced labour. An import ban would align Australia’s trade policy with emerging global standards by incentivising importers to eradicate forced labour in their supply chains. Potential challenges could be mitigated through diplomatic engagement, robust stakeholder consultation, supply chain diversification, and the introduction of complementary measures such as victim support programs. 

Problem Identification

Forced labour is defined as "all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily” (Forced Labour Convention No 29, 1930, n.p.). Australia’s Asia-Pacific region has the highest number of people experiencing forced labour, with an estimated 15.1 million people affected (International Labour Organization, 2022, p. 23). This, coupled with the prominence of high-risk industries in Australia—such as agriculture, fashion, extractives, and electronics (Galatas et al., 2020)—places the country at significant risk. Australia is estimated to import AUD$25 billion worth of goods annually that are at-risk of being produced under conditions of forced labour (Walk Free, 2023). Other reports suggest that Australia is currently importing thousands of goods from companies that have been blacklisted in other jurisdictions, such as the United States, due to their alleged links to forced labour (Knaus & Davidson, 2025). However, these figures likely underestimate the true scale of the issue (Yea, 2022).

The prevalence of forced labour distorts capital markets, creates supply chain vulnerabilities for Australia, and contravenes the country’s obligations under international law. As jurisdictions like the US and EU shift towards promoting corporate human rights diligence, the presence of forced labour in Australian company supply chains will generate further reputational risks for Australian entities.

Context

Background

In a joint statement signed with the Canadian, Japanese, NZ, UK, and US governments in June 2023, the Australian Government condemned instances of forced labour in global supply chains as “gross abuses of human rights, as well as economic issues” (Minister for Foreign Affairs, 2023). Under international law, Australia has an obligation to address and prevent instances of forced labour, as a party to multiple significant international treaties aimed at eliminating these practices (Attorney-General’s Department). Moreover, Australia’s foreign policy documents have consistently affirmed advancing international human rights as a core national interest and “underlying principle” underpinning Australia’s global engagement, as part of the country’s broader commitment to protecting and upholding the international rules-based order (DFAT, 2017, p. 89; DFAT).

There are two key reasons why eliminating forced labour in Australian supply chains is in Australia’s national interest:

• "Governance risk" for Australian businesses: Forced labour in supply chains can expose Australian entities to damaging regulatory action in other jurisdictions and negative media scrutiny (Cockayne, 2022, p. 14). For example, Ansell, an Australian manufacturer, currently faces US litigation by Bangladeshi workers alleging mistreatment in its third-party supplier factory (Terzon, 2022). Such “governance risks” will only become more acute as the global regulatory landscape continues to shift towards promoting corporate social responsibility (Senko et al. 2024), with forced labour import bans now in place in both the US and Canada, and forthcoming in the European Union by the end of 2027 (Covington, 2024). It is in Australia’s interest to align its laws with influential regulatory powers like the EU to ensure that Australian companies maintain competitiveness in lucrative markets and do not face future barriers to market access (Senko et al. 2024; Bradford, 2012). 

• Distorted global markets: The prevalence of forced labour in supply chains distorts global capital markets by not pricing in the true costs of production and distribution to a company’s financial balance sheet. This can lead to “faulty valuations of businesses that rely on illegal labour practices embedded deep in supply chains” (Cockayne, 2022, p. 14). This discourages innovation, makes industry vulnerable to competition, and ultimately can create inefficient capital allocation in the global economy which “undercuts pricing and viability of legitimate businesses” (Cockayne, 2023, p. 6; Cockayne, 2022, p. 13). This also creates supply chain vulnerabilities for Australia, by allowing certain countries to charge uncompetitive prices and flood the market, creating an overdependence on certain markets for critical goods. In 2023, Australia endorsed a joint statement which articulated how there “must be no place for such practices in the global trading system” because they  can “confer an unfair competitive advantage” for certain countries (Minister for Foreign Affairs, 2023)

Current Policy Landscape: Australia's Modern Slavery Act 2018

Australia’s Modern Slavery Act 2018 (the Act) targets modern slavery risks in supply chains through a corporate disclosure scheme (Australian Government, 2018). The Act creates a reporting requirement for approximately 2,500 domestic entities with “annual consolidated revenue” exceeding AUD$100 million, which must submit an annual “modern slavery statement” detailing their operations (Australian Government, 2018, p. 3).

The Act has no financial penalties for noncompliance and does not require companies to act to remedy detected modern slavery issues (Fellows et al., 2020, p. 210). The social disclosure regime assumes that mandatory statutory public reporting requirements fuel a “race to the top” between businesses to eradicate modern slavery in their supply chains (Sinclair and Nolan, 2020, p. 164). However, an independent review of the Act published in May 2023 recognised that “there is no hard evidence that the Modern Slavery Act in its early years has yet caused meaningful change for people living in conditions of modern slavery” (Australian Government, 2023, p. 8).

According to a 2022 report, “only 27% of companies demonstrate some form of effective action to address modern slavery risks in their operations and supply chains” (Sinclair & Dinshaw, 2022, p. 5).

Literature Review: The case for an import ban

Import bans on goods made using forced labour are applied based on the rationale that “losing access to profitable markets will encourage producers and imports to take steps to address forced labour” (Justice & Care, 2022, p. 36). In general, import bans are most effective when they target specific companies and sectors where human rights abuses have been verified and prioritise the remediation of victims (Justice & Care, 2022, p. 40). Coordinated efforts from several countries increase the effectiveness of an import ban by “raising the number of markets that infractors would be banned from” while simultaneously reducing the cost and resources of its implementation (Justice & Care, 2022, p. 40, Cockayne, 2022, p. 1). 

However, it is important to note that such bans are “not a panacea” (Hannahs, 2021) and this single intervention should be applied alongside other regulatory and non-regulatory levers (Pietropaoli et al., 2021, p. 1).

Case study: US import ban

Section 307 of the US Tariff Act empowers the US Customs and Border Protection (CBP) officials to make withhold release orders (WROs) and seize goods at the border, based on “reasonable but not conclusive evidence of forced labour” (Congressional Research Service 2024). The onus then falls on the importer of the goods to prove that the goods are not laced with forced labour. 

The US Bureau of International Labor Affairs (ILAB) maintains a public list of goods and their source countries which it “has reason to believe are produced by child labour or forced labour in violation of international standards” (US Department of Labor, 2024). In June 2022, the Uyghur Forced Labour Prevention Act (UFLPA) came into effect, establishing the rebuttable presumption that the import ban applies to goods with links to the Xinjiang Uyghur Autonomous Region due to its widespread human rights violations and documented high forced labour risks (H.R.6256, 2021, p. 1; Australian Minister for Foreign Affairs, 2022). 

For example, in July 2020, the CBP issued a WRO against two subsidiaries of Top Glove in Malaysia, the world’s largest rubber glove producer, based on reasonable belief that they were using debt bondage to produce rubber gloves (Nissen and De Aguinaga 2024, p. 2). Due to the WRO, the company's North American sales volume declined by 68% (Palma, 2021) and the other top three manufacturers followed suit, resulting in “unprecedented” repayments to over 20,000 workers (Justice & Care, 2022, p. 33). In September 2021, the CBP lifted its import ban on Top Glove, citing “satisfactory evidence” that the disposable gloves are “no longer mined, produced, or manufactured in any part with forced labour” (US Customs & Border Protection, 2021, p. 3).

Policy Options

In order to prevent Australian businesses from perpetuating human rights abuses in their supply chains, the Australian Government should enforce restrictions on the entry of forced labour-tainted goods into Australian markets. There are several policy options available to achieve this:

Option 1: Amend the Modern Slavery Act 2018 to require companies to conduct human rights due diligence reporting on forced labour risks in their supply chains

The Australian Government would amend the mandatory criteria for modern slavery statements under Section 16(1) of the Act, to require companies to act rather than just report on instances of human rights abuses in supply chains. Section 16(1) would be amended to require a reporting entity to conduct a human rights due diligence (HRDD) and impact assessment, as elaborated in the UN Guiding Principles on Business and Human Rights (OHCHR, 2011). The reporting entity would be required to

1. identify and assess actual and potential adverse impacts

2. internally integrate and act on these findings through preventative and mitigating action

3. track the effectiveness of responses

4. publicly communicate how they are enacting HRDD

5. have remediation processes in place for when HRDD reveals that an entity causes or contributes to adverse impacts.

Human rights due diligence is the authoritative global standard on business and human rights. Unlike the “tick-a-box” approach, it requires entities to identify, prevent, mitigate, and account for how they address adverse human rights impacts (Landau & Marshall, 2018, p. 334). However, self-reporting would be limited in its effectiveness as the vast majority of companies fail to identify or act on key risks (Sinclair & Dinshaw, 2022, p. 2).

Option 2: Amend the Customs Act 1901 to prohibit the importation into Australia of goods that are produced in whole or in part in the Xinjiang Uyghur Autonomous Region (XUAR)

The Australian Government would follow the US Uyghur Forced Labour Prevention Act of 2021 by seizing and detaining goods at the border under the ‘rebuttable presumption’ that goods from Xinjiang are tainted with forced labour. This would prevent Australia’s complicity in the systemic state-sanctioned forced labour against Uyghurs and other ethnic minorities (OHCHR 2022). However, the explicit reference to Chinese government activities would likely damage Australia’s relationship with Beijing, and limit the law’s scope. Such a ban would disproportionately impact Australian imports of the polysilicon materials used to produce solar panels, and cotton used in clothing and other garments (Uren 2021; Walden 2021).

Option 3: Amend the Customs Act 1901 to prohibit the importation into Australia of goods that are produced in whole or in part by forced labour

The Australian Government would follow the US model, releasing an annual list of products and their associated geographic jurisdictions that are considered to be at risk of being produced by forced labour, and seizing and detaining these goods at the border. The list could be developed in coordination with like-minded allies and partners like Canada, New Zealand, United Kingdom, the United States, and the European Union to minimise bureaucratic burden and maximise aggregate market share (Minister for Foreign Affairs 2018). Responsibility would lie with the importing entity to refute this “rebuttable presumption” and demonstrate their goods are not tainted by forced labour. This would create a centralised screening process for goods entering the Australian market, and align Australia with other jurisdictions to set a minimum standard. However, this would require upskilling at the Australian border, as well as resources to produce and update the list of implicated goods. 

Policy Recommendation

Option 3, to “Amend the Customs Act 1901 to prohibit the importation into Australia of goods that are produced in whole or in part by forced labour” is recommended as the most viable way to align Australia with other jurisdictions’ forced labour regulatory regimes and impose costs on companies to incentivise change in their supply chains.

Specifically, the reform would operate as follows:

1. Creation of a statutory prohibition

• Introduce a new Section 50A to the Customs Act 1901 which provides for an absolute prohibition on the importation of goods produced or manufactured, in whole or in part through the use of forced labour. 

2. Definition of forced labour

• Section 50A would define “forced labour” by reference to the Criminal Code Act 1995 (Criminal Code), which would provide the legal test for determining whether goods should be prohibited.

3. Rebuttable presumption via enforceable list

• The legislation would empower the Department of Home Affairs (Home Affairs) to publish and maintain a list (‘the list’) of specific products and associated geographic jurisdictions that are rebuttably presumed to involve forced labour. Goods falling within the scope of this list would be presumed to be prohibited under section 50A unless the importer can demonstrate otherwise.

• This list prescribed by Home Affairs should ideally be developed in consultation and coordination with like-minded allies with similar legislation, like Canada, New Zealand, United Kingdom, the United States, and the European Union, and leverage existing frameworks like the US ILAB list.

• Home Affairs should establish a formal procedure for the general public and civil society organisations to petition for classes of goods to be added and removed from the prohibited imports lists, leveraging the reach of NGOs to guide decision-making (Cockayne 2020, p. 9). 

4. Burden of proof and enforcement at the border

• This legislation would be enforced by the Australian Border Force (ABF), within the Home Affairs portfolio, as the body responsible for customs administration and border control, and “enabling legitimate trade.”

• Where imported goods fall within a product category and geographic jurisdiction specified on the Home Affairs’ list, the ABF would detain those goods at the border and treat them as presumptively prohibited under Section 50A.

• Responsibility would then lie with the importing entity to rebut that presumption by providing credible and verifiable evidence that the goods were not produced, manufactured, or assembled, in whole or in part, using forced labour as defined in the Criminal Code.

• If the importer fails to rebut the presumption to the satisfaction of the ABF, the goods would be classified as prohibited imports for the purposes of subsection 51(1) of the Customs Act 1901 and denied entry into Australia.

5. Interaction between the list and the prohibition

• The prohibition arises directly from the Section 50A amendment and the Criminal Code definition. The list does not itself create the ban, but facilitates enforcement by identifying high‑risk goods and jurisdictions and shifting the evidentiary burden to importers.

Risks

Barriers

Political appetite The Australian Government could be hesitant to introduce new trade policy settings given the current strategic environment and ongoing trade tensions between the United States and China, Australia’s largest trading partner. However, countering exploitation in supply chains and abolishing modern slavery in Australia and overseas features in the Australian Labor Party’s most recent national platform (Australian Labor Party 2023, pp. 107–8). In the Albanese Government’s first term, the appointment of a federal Anti-Slavery Commissioner further suggests a willingness to expend political capital and resources towards addressing this issue.

Private sector opposition

Australian domestic entities broadly prefer a voluntary due diligence approach to forced labour risks, and have expressed opposition to legislation which would impose costs on them. The Australian Government has previously highlighted the need for extensive consultation with business before enforcing an import ban (Australian Government 2022, p. 3). The establishment of a public list would create “greater predictability for importers and the domestic market more broadly” about the products that will be subject to enforcement action (Cockayne 2020, p. 9).

Bureaucratic burden

The Australian Government has previously highlighted the “significant practical, administration and enforcement challenges” of enforcing a forced labour import ban, and indicated it would require “extensive scoping and consultation” due to the complexity of modern supply chains (2022, p. 4). However, adapting the US WRO enforcement approach with a rebuttable presumption significantly reduces the reliance on frontline customs officers by reversing the burden of proof to place the onus on companies to furnish evidence. Furthermore, pooling resources by developing a joint list of high-risk goods with like-minded countries would ease the bureaucratic burden (Minister for Foreign Affairs, 2018).

Risks

Exploiting import ban for geopolitical aims There is a risk of governments abusing import bans to target certain countries as a political, geopolitical, and protectionist instrument rather than human rights tool (Justice & Care, 2022, p. 39). For example, research shows that between 2015 and 2021, 57% of WROs issued by the US Government were directed at Chinese producers, despite the fact that goods produced in China only accounted for 3.9% of the products included on the ILAB list (Shehadi & van der Merwe 2021). The government could mitigate this risk by introducing an advisory body to assess proposed additions and removals to the list, following a similar model to the non-statutory Foreign Investment Review Board, which provides advice to the Treasurer on significant and sensitive foreign investment applications, including their national security implications (Australian Government).

Hampering Australia’s energy transition Australia’s heavy reliance on solar panel imports from China, which dominates manufacturing in the solar panel supply chain, would likely be impacted by an import ban (Edmonstone 2024; Morton 2022). To mitigate this risk, Australia could diversify its imports and develop a strategy to build a less concentrated global solar supply chain, including funding strategic segments of the supply chain through  initiatives such as the Solar Sunshot, and assessing procurement to leverage other countries’ investments in solar manufacturing (Edmonstone 2024, p. 18).

Adverse impacts on labour conditions In the absence of formal requirements to improve worker conditions, a loss in export profit earnings could lead to wage reductions, heightening short-term risks of forced labour, or prompt companies to close rather than address underlying human rights issues (Justice & Care, 2022, pp. 39–40; Cockayne 2020, p. 5). This highlights the need for the Australian Government to take a holistic approach and invest in complementary measures such as victim remediation and compensation. Moreover, bans could have minimal impact if companies can shift to new markets (Cockayne 2020, p. 5). This demonstrates the importance of collaborating with other countries, aggregating enough market share to make the costs associated with the loss of access to profitable markets great enough for companies to be incentivised to improve worker conditions

References

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