Newly exposed details that Ningbo Dairy, which trades in Australia as YoYou, was actively recruiting dairy farm workers two years ago threaten to stoke fears over the Chinese-Australian Free Trade Agreement.

The FTA's impact on local jobs was the subject of bitter political point-scoring between the federal government and opposition last week. 

A glimpse of the future? An employee at a dairy farm in Shandong province, China Photo: Qilai Shen

"There's been widespread evidence of the abuse of [migrant worker] 457 and backpacker visas in a range of rural industries, from food processing right through the supply chain," Victorian senator Kim Carr, shadow innovation and industry minister, said. "We need to be very mindful [with the China FTA] of the long history of irregularities that have occurred and why it is so important to maintain Australian standards."

Ben Davis, Victorian Secretary of the Australian Workers' Union, which represents dairy farm workers, described the historic revelations as appalling. He fears such incidents will become more common under the new trade agreement.  "ChAFTA sends a signal to Chinese employers that it will be easier to get employees into Australia, particularly where a significant capital investment is being made at the same time,"

Ningbo Dairy has bought several dairy farms in Kernot, in South Gippsland, and plans to build a feedlot and $20 million milk-processing plant to export fresh milk directly to Chinese consumers. Ningbo's vice-president Harry Wang last year criticised Australia's high wage costs and said he could improve the Kernot farms' productivity and profitability by importing workers from its 12,000-cow mega dairy operations in China.

Several sources say YoYou management later backed away from the claims, saying its comments were misconstrued. But Fairfax Media has uncovered evidence that in August 2013, Ningbo was actively recruiting Chinese dairy farm workers for Australian jobs.

Broadcast and social media records show Ningbo was seeking "livestock management, and animal science and dairy farming-related" employees, with some English, to work in Gippsland.

At the time, the unemployment rate in the dairy-intensive Bass Coast Shire, was 4.79 per cent. It is now 5.74 per cent.

Whether YoYou first sought to fill the roles locally is unclear. The company did not respond to requests for comment made via Jon McNaught, a consultant with professional services firm GHD, which is managing the YoYou expansion application.

Mr McNaught has previously said YoYou's expansion plans were spurred into action by the signing of the FTA. "That has encouraged them with their planned investment," he told the ABC in February.

Trade and Investment Minister Andrew Robb has said foreign investment "and the innovation, capacity and new perspectives that come with it" is critical if the local industry is to reach its full potential.

Trade Minister Andrew Robb says foreign investment is critical for innovation and new ways of thinking. Photo: Andrew Meares

Critics say the protection of local jobs and conditions is too weak under existing regulations, and the China trade agreement will only weaken them further.

Companies seeking to hire workers on 457 visas are required to do labour-market testing, but the provisions are weak, Dr Joanna Howe, an expert in temporary labour migration and senior lecturer at the University of Adelaide Law School, says. A single ad on social media such as Facebook can suffice, she says, and the Immigration Department, which oversees the program, is not resourced to check compliance.

Several sections of the FTA have the potential to further weaken those provisions, allowing certain projects or assets with significant Chinese ownership to bring in staff without local labour-market testing, and local wages, conditions or standards to be undercut in some cases.

"It's still unclear how that will operate with Australian laws that require testing, but the [section] seems to open up new immigration possibilities and there will be more Chinese workers come in as a result," Dr Howe said.

"There's a supposition that Australians in areas of particularly high unemployment wouldn't fill these sort of jobs – of course they would," Mr Davis said.

"If they are not using local labour, what's the point of the [foreign] investment in the first place? Because not only will the profits be repatriated, so too will the employment."

Chinese Commerce Minister Gao Hucheng, left, Prime Minister Tony Abbott and Trade Minister Andrew Robb at the signing ceremony for the China-Australia Free Trade Agreement in Canberra in June. Photo: Alex Ellinghausen

YoYou Dairy was already the focus of controversy, with local outrage over expansion plans that include housing a herd of 500-1000 cows in giant barns for most of the year.

The company plans to increased per-cow milk production from the Australian average of 6000 litres a year to the 9000 achieved on its 12,000-cow "mega dairy" Chinese operation.

The plans were rejected by the local council on August 19 after it considered 430 objections.

YoYou Dairy has two months to appeal the decision at VCAT.

With Philip Wen