Australia stays on the sidelines as West unites to sanction China

Australia has yet to pass legislation that would allow the government to join allies in imposing coordinated sanctions against Chinese officials. PHOTO: AFP

SYDNEY (BLOOMBERG) - Last December, Australian lawmakers from across the aisle called on Prime Minister Scott Morrison to join the United States and other countries in passing its own version of the Magnitsky law to "take the lead in developing a best practice targeted sanctions regime".

Yet six months later, with Australia-China ties only getting worse, Mr Morrison has still yet to pull the trigger on legislation that would allow his government to join allies in imposing coordinated sanctions against officials from the country's largest trading partner.

When asked last week why the administration had not introduced the Bill, Foreign Affairs Minister Marise Payne remained non-commital. "The government will continue to determine the path forward and respond when it's able to do so," she told a parliamentary hearing.

Morrison has been outspoken in calling for multilateral coordinated action by "like-minded democracies" to push back against China, saying on Wednesday that Australia was urging liberalised nations to support a "world order that favours freedom over autocracy and authoritarianism".

He is set to attend the Group of Seven summit, which starts on Friday (June 11) in Britain, where leaders are expected to flesh out plans to counter China's growing influence. On his way, he will visit Singapore on Thursday for talks with Prime Minister Lee Hsien Loong on bilateral cooperation.

But the delay in passing the Magnitsky law left Australia cheering from the sidelines in March when the US, the European Union, Britain and Canada used similar laws to sanction Chinese officials involved in alleged human rights abuses in Xinjiang. And, with an election due by May next year, it is unlikely he will want to anger China even more over the next year.

"Perhaps the Australian government is concerned about causing even more friction to a relationship that seems to get described at a new rock-bottom on a monthly basis," said Ms Natasha Kassam, a former Australian diplomat who is the director of the Lowy Institute's public opinion and foreign policy programme.

The government is likely to pass the law eventually but "it seems it's not at the top of the priority list and probably won't be for some time," she said. "If the legislation passes, there will be pressure within the government to use it."

Further complications

The main Labour opposition has urged the government to speed up the legislative process, with Shadow Foreign Affairs Minister Penny Wong saying this week the delay passing the Bill was "sending precisely the wrong message".

Still, the government is wary about provoking a Chinese response that could hit the economy just as growth starts to gain momentum. Beijing imposed its own sanctions on individuals and organisations from Europe, Britain, Canada and the US after their actions in March, and would probably do the same in response to a similar decision by Australia.

Ties between Canberra and Beijing, which started to become strained in 2018, nosedived last year when Mr Morrison's government called for independent investigators to probe the origins of the Covid-19 pandemic and also repeatedly criticised Chinese actions in Hong Kong and Xinjiang. Beijing responded with a range of trade reprisals, including massive tariffs on wine and barley imports and a block on most shipments of Australian coal.

Australia should "avoid these kinds of harsh new measures" that will cause further tensions, said Dr Henry Wang Huiyao, president and founder of the Centre for China and Globalisation policy research group in Beijing.

"The Europeans sanctioned China, China sanctioned back, and that put all their achievements back to square one," Dr Wang said last week.

He described current Australia-China ties as a "wound", warning that "if you put more salt on that, you're going to cause more pain".

Sanctions law

Australia currently has sanctions on about 20 nations and entities under laws that allow the government to implement both United Nations Security Council-approved measures as well as against certain individuals.

But the scope of that is limited, preventing Australia from joining the coordinated Xinjiang sanctions in March.

Instead, Australia issued a separate statement with New Zealand saying there was "clear evidence of severe human rights abuses that include restrictions on freedom of religion, mass surveillance, large-scale extra-judicial detentions" in the region.

Establishing a Magnitsky-style law would mean "sanctions could be applied more quickly in response to egregious or systematic human rights abuses, without the need to establish or amend a specific country-based regime," the Department of Foreign Affairs wrote in a submission to the parliamentary committee, which last year recommended passing the law.

The original US Magnitsky law was passed in 2012 to punish Russian officials involved in the death of Mr Sergei Magnitsky, a Russian lawyer who died in prison after accusing officials of corruption.

It was expanded in 2016 to punish foreign individuals or entities globally for human rights violations or corruption.

Among the 160 submissions delivered to the inquiry was a February 2020 statement from Mr Peter Hass, then principal deputy assistant secretary of state, who said the US applauded "your government for its effort to develop this sanctions programme".

Long-armed jurisdiction

Professor of international law Don Rothwell at the Australian National University said such laws would not be a natural fit for Australia - a relatively small nation without a history of long-armed jurisdiction.

"Once this type of legislation has been enacted, the drivers for it to be used may well come from within government," Prof Rothwell said. "This is not a small step for Australia."

Still, it is likely a question of when - not if - Australia passes its own Magnitsky legislation, according to Mr Richard Maude, a former head of the nation's peak intelligence analysis department and now executive director for policy at the Asia Society.

"Given how many other incredibly difficult issues are on the plate at the moment with China, they could be forgiven for walking towards this rather than running," he said.

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