Month: October 2015

China-Australia Free Trade Agreement and Labour “Safeguards”

The China-Australia Free Trade Agreement (ChAFTA) took 10 years and 21 rounds of negotiations before it was concluded in November 2014. Following the signing of the Agreement in Australia on 17 June 2015, the Australian Federal Government proposed the introduction of a new visa type in order to implement the trade arrangements of ChAFTA.

The new visa will be a subclass of the Temporary Work (Skilled) (subclass 457) visa covered by labour agreements called Investment Facilitation Arrangements (IFAs). IFA’s can be implemented by Chinese companies investing in Australia. The visa is intended to enable Chinese companies to employ foreign workers in Australia for large infrastructure-based projects. However, the less stringent rules of the proposed new visa have been protested by the Union Movement in Australia.

The opposition Labour Government has suggested a series of amendments to IFA’s intended to “safeguard” the Australian labour force. It seems that this package of “safeguards” will be adopted by the Federal Government.

Investment Facilitation Arrangements (IFAs)

The new stream of subclass 457 visas are intended to make it easier for Chinese owned companies registered in Australia to import skills for their projects. Eligible projects must commit to a capital expenditure of over $150 million.

IFA’s will operate within the framework of the existing subclass 457 visa, however the major difference was supposed to include that:

  • IFA’s would not require the sponsoring company to meet current labour market testing provisions that apply to a number of nominated occupations; and
  • There would be no necessity to show that there is a skills shortage in the Australian labour market.

This was supposed to enable Chinese companies investing in projects over $150 million in Australia to bypass the labour market testing provisions in sponsoring overseas workers in Australia.

Three Stage Process of the IFA

Applying for an IFA will involve a three stage process:

  1. Firstly, a substantially Chinese-owned company represented by the China International Contractors Association (CICA) must prove to the Australian the Foreign Affairs and Trade Department that a project is eligible for an infrastructure “IFA” in accordance with ChAFTA;
  2. If the Chinese-owned company’s project is deemed to be an “IFA,” it is possible to then apply to the Department of Immigration and Border Protection (DIBP) to negotiate the IFA. The terms of the agreement will include, the number of foreign workers able to enter Australia, their English language proficiency and the qualifications and employment experience of the foreign workers; and
  3. Thirdly, each employer involved in the IFA will be required to set up a specific labour agreement with the DIBP stipulating the number and type of jobs needed for the project and the sponsorship obligations of the employer.

Concern has been expressed by the Union movement and other related parties about lack of labour market testing for companies bringing in foreign workers under an IFA.

Labour “Safeguards”

Labour has agreed to support the introduction of ChAFTA enabling legislation in Parliament if a package of “safeguards” are adopted which will amend the requirements of IFA’s. The Labour Party claims that the “safeguard” package is intended to protect Australian wages and conditions and uphold workplace skills and safety standards.

The package of “safeguards” include the following items:

  1. Employers entering migration work agreements, including under ChAFTA IFA’s, will be required to conduct labour market testing;
  2. Employers will be required to adopt training plans showing how they will train local workers, and overseas worker support plans showing how they will support subclass 457 visa workers;
  3. New visa conditions will be created requiring 457 visa workers in licenced trade occupations not to work unless they hold a licence, to obtain the relevant licence within 90 days of arriving in Australia and to notify the DIBP if refused a licence; and
  4. Requirements for public reporting on the impact of work agreements.

Changes to the requirements of IFA’s will be included in the Migration Regulations 1994 to ensure that they are legally binding.

IFA’s into the Future

It seems that the Federal Government will adopt the “safeguard” package proposed by the Labour Party in relation to IFA’s. This will increase the bureaucratic hurdles for substantially Chinese-owned companies wishing to invest in multi-million dollar infrastructure projects in Australia, should they require the assistance of foreign workers. Meeting the requirements of IFA’s and implementing sponsorship obligations stipulated in the migration agreements will be more onerous than was initially intended under ChAFTA for Chinese companies.

For companies wishing to invest in Australia and requiring employment of foreign workers for specific projects, please feel free to contact the author to discuss the most appropriate visa options by email at or by telephone on +61 3 9021 0986 or +61 (0)423 701 747 for instructions.


The information on this website is intended only to provide a summary and general overview on relevant matters. It is not intended to be comprehensive nor does it constitute legal advice. You are advised to seek legal or other professional advice before acting or relying on any of the content contained in this website.