On the same day as entering the China-Australia Free Trade Agreement, China and Australia reached agreement on a memorandum of understanding (MOU) signaling the establishment of an infrastructure facilitation agreement (IFA) framework designed to allow Chinese workers to work in Australia on infrastructure projects worth over AUD$150 million.  The MOU will take effect on a date agreed between the governments, and will remain in effect until terminated.

How will it work?

An IFA for a project will be established between the Australian Department of Immigration and Border Protection (DIBP) and a project company.

In addition to the monetary threshold, the MOU sets out criteria for the project and the company which must be met before an IFA can be established.  Most notably:

  • the project company must be registered in Australia
  • the project must be related to infrastructure development within the food and agribusiness, resources and energy, transport, telecommunications, power supply and generation, environment, or tourism sectors, and
  • the project company must agree to comply with all Australian laws and regulations, including applicable Australian workplace law, work health and safety law and relevant Australian licensing, regulation and certification standards.

The China International Contractors Association (CHINCA) and the Australian Department of Foreign Affairs and Trade (DFAT) must also recommend the project to DIBP.  The recommendation will trigger negotiations between DIBP and the project company over matters including:

  • the occupations covered by the IFA project agreement
  • English language proficiency requirements, and
  • qualifications and experience requirements.

Once executed, an IFA allows labour agreements to be negotiated with DIBP to sponsor and nominate temporary skilled workers to be engaged on the project. 

Visas and conditions of employment

The grant of visas will also be subject to meeting Australian nomination and visa requirements.

A labour agreement will set out the number, occupations and terms and conditions under which temporary skilled workers can be nominated, consistent with the terms of the IFA, and the sponsorship obligations associated with the labour agreement, including any requirements for labour market testing.

All direct employers under an IFA and workers granted visas under an approved IFA labour agreement will be required to comply with applicable Australian laws and relevant Australian licensing, regulation and certification standards.

Release of MOU and guidelines

The MOU is yet to commence, and guidelines on its operation are yet to be released.  There is therefore uncertainty about the impact of the IFA, including how it will work within the existing visa processes.

It is understood that guidelines on the operation of the new IFA system are to be released shortly.