AUKUS bill to restrict use of foreign workers

Defence and technology companies will face restrictions on employing foreigners under new AUKUS legislation to be introduced into parliament on Thursday.

Richard Marles and SU Defence Secretary Lloyd Austin at the Pentagon in Washington DC last December.

Defence and technology companies will face restrictions on employing foreigners under new AUKUS legislation to be introduced into parliament on Thursday.

The Defence Trade Controls Amendment Bill 2023 will help to bring Australia into the US’s military industrial ecosystem, enabling the transfer of sensitive US technology to Australia, and making it easier for local firms to get nuclear submarine contracts under the AUKUS pact.

But firms producing military or dual-use technology will have to seek exemptions if they employ foreign workers from a range of countries, including China and India.

Universities undertaking research with potential military applications will also face new restrictions on partnerships with foreign scientists.

Workers and researchers from the US, UK, Canada, New Zealand, Japan and much of Europe will be automatically exempted under the legislation.

The bill will also require companies to obtain a licence to transfer controlled military and dual-use technologies to foreign countries other than the US and the UK.

“This legislation will provide the defence industry, science and research sectors with greater opportunities for collaboration and trade with our AUKUS partners without the burdensome red tape,” Defence Minister Richard Marles said.

“This will benefit defence industry in Australia, unlocking $5bn – more than half of our annual exports – to our AUKUS partners.”

Firms producing military or dual-use technology as part of the AUKUS deal will have to seek exemptions if they employ foreign workers from a range of countries.

Australian Industry & Defence Network chief executive Brent Clark said the legislation would make it easier for many defence companies to do business with Australia’s closest allies, the US and UK.

But it would impose a significant new regulatory burden, particularly on small and medium-sized enterprises, he said.

“There will be compliance issues. Clearly, companies would need to be applying for exemptions on non-Australian workers. And if those exemptions aren’t given, the impact on SMEs could be quite extreme,” Mr Clark said.

He said companies that relied on exporting to countries outside of the US, UK, Canada and New Zealand would also face issues, and may be forced to reconsider work with those countries”.

The Australian Academy of Science has also expressed concerns, warning the bill could limit important research collaborations. In a submission on an exposure draft of the legislation, the academy warned it risked “sending signals that discourage the hiring of international experts, enrolling of international students in Australian institutions, or initiation or continuation of international research collaborations outside of the US and UK”.

“It could also deter foreign persons from coming to Australia to work or collaborate. Australia welcomes and relies on foreign students and researchers who make up a significant proportion of the research workforce and who will be needed in greater, not fewer, numbers in the future to meet national needs.”

Mr Marles will introduce the legislation into parliament before flying out for California on Thursday evening for an AUKUS meeting with US Defence Secretary Lloyd Austin and UK Defence Secretary Grant Shapps.