Australian Corporate Accountability Network of Australia

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A Modern Slavery Act for Australia?

In this Corporate Accountability Network blog, Sophia Collins examines the significant opportunity the Modern Slavery Inquiry, which is currently being held by the Australian government, presents for Australia to be a leader in the Asia-Pacific region and take strong action against modern slavery in corporate supply chains. She considers similar legislation which has been introduced in other jurisdictions, particularly the UK Modern Slavery Act, as a possible model for any Australian legislation.

 A child working in a stone quarry in Rajasthan, India. Forced labour is common in Rajasthan stone quarries and quarries elsewhere in India. Indian stone is commonly sold in Australia without a way of ensuring that forced and child workers have not quarried the stone. 

A child working in a stone quarry in Rajasthan, India. Forced labour is common in Rajasthan stone quarries and quarries elsewhere in India. Indian stone is commonly sold in Australia without a way of ensuring that forced and child workers have not quarried the stone. 

Modern slavery was recently characterised by British Prime Minister Theresa May as ‘the great human rights issue of our time’.[1] Globalisation, transnational business structures and complex supply chains have made detecting and combatting modern slavery an increasingly challenging task. Several jurisdictions have attempted to combat this issue by enacting legislation.[2] These statutes place obligations on business to publish disclosure statements, detailing their policies and practices to combat modern slavery in their supply chains. On 15 February 2017, Senator the Hon George Brandis QC requested an inquiry into establishing a Modern Slavery Act (‘MSA’) in Australia. This post is the first in a series which will provide context to the Inquiry, analyse the submissions produced, and report on future hearings.

MODERN SLAVERY IN AUSTRALIA

Modern slavery impacts the Australian community both directly and indirectly. The 2016 Global Slavery Index estimated that approximately 4,300 people are currently enslaved or held in slave like conditions in Australia.[3] Modern slavery also affects Australians indirectly, in their capacity as consumers of goods and services tainted by modern slavery, and as investors in companies which condone these practices in their supply chains. The Trading Lives report produced by Joint Standing Committee on Foreign Affairs, Defence and Trade indicates that many goods imported into Australia are produced with a high risk of forced labour or child labour.[4] While there is legislation in Australia which criminalises slavery, there is insufficient regulation of companies providing goods and services tainted by these practices.

Slavery is a crime under the Commonwealth Criminal Code Act 1995 (‘the Code’).[5]  Provisions in the Code prohibit slavery and slavery-like conditions, as well as trafficking in persons.[6] However, despite the fact that these provisions apply regardless of whether the offence occurs outside Australia, they do not adequately address modern slavery in supply chains.[7] Currently, Australia does not have ‘strong, specific reporting requirements’ for businesses about their policies for identifying and combating modern slavery in their supply chains.[8] As a result, many businesses have not implemented comprehensive policies to eradicate these practices.[9] Even among companies conducting audits or implementing policies, there is no uniform way of publishing these practices. This frustrates the ability of consumers and investors to make ethical and informed choices about which businesses they support. It also does not incentivise ethical practices among businesses.

THE GLOBAL TREND TOWARDS CORPORATE ACCOUNTABILITY FOR MODERN SLAVERY IN SUPPLY CHAINS

Several jurisdictions have implemented legislation which places responsibility on businesses to report on forced labour and human trafficking in their supply chains.[10] These statutes vary in their approach and applicability; however, all require select organisations to publish disclosure statements regarding their policies to eradicate modern slavery from their supply chains. The UK MSA is the most renowned of these statutes, because it applies more broadly than other legislation. The UK MSA enacted various strategies to combat modern slavery. It consolidated existing legislation on modern slavery, implemented harsher penalties for these crimes, and introduced an anti-slavery commissioner.[11] The UK MSA also implemented compulsory disclosure statements for certain businesses.[12] These provisions are in Part 5 of the MSA and are known as the Transparency in Supply Chains provisions.

 
 Unionists organising against exploitation of Indonesian garment workers by Australian companies. Credit: Industriall

Unionists organising against exploitation of Indonesian garment workers by Australian companies. Credit: Industriall

 

The Transparency in Supply Chains Provisions aim to ‘increase transparency’[13] about forced labour and human trafficking in corporate supply chains and create ‘competition to drive up standards’ among commercial organisations.[14] The provisions require companies to publish an annual ‘slavery and human trafficking statement’ detailing the steps they have taken ‘to ensure that slavery and trafficking is not taking place’[15] either ‘in any part of… [the organisation’s] own business’[16] or ‘in any of its supplychains.’[17] If an organisation has taken no steps, it must publish this.[18] A ‘director, designated member or partner’ must sign the statement before it is published.[19] Part 5 of the UK MSA applies to any commercial organisation supplying goods or services in the United Kingdom with a total annual turnover greater than £36 million.[20]

While there has been some criticism of the UK MSA, the Transparency in Supply Chains Provisions represent a significant development in the eradication of modern slavery worldwide. These provisions have already made a positive impact on corporate behaviour. The Corporate Leadership on Modern Slavery report recently found that following the enactment of the UK MSA, 58% of effected companies have ‘dramatically increased communication of their expectations on actions to address modern slavery’. [21] 67% of effected companies have also provided training and awareness to board members and senior executives on these issues.[22] This highlights the power of modern slavery legislation to effect business practices and cultures.

THE INQUIRY

This Inquiry is a significant opportunity for Australia to be a leader in the Asia-Pacific region, and take strong action against modern slavery in corporate supply chains. Last Friday (28 April) was the deadline for interested persons and organisations to make a submission to the Inquiry. So far, 13 submissions have been published. To date, all submissions to the Inquiry support the implementation of some form of MSA in Australia. The submissions highlight many of the concerns and criticisms of the UK MSA, and provide recommendations for how this legislation could be improved. A further post, analysing these submissions will be published following the deadline for submissions from overseas governments, organizations, and individuals. It will be interesting to see how this Inquiry unfolds and the recommendations the committee makes on this crucial human rights issue. Watch this space!

   Sophia Collins

Sophia Collins

About the Author: Sophia Collins is a fourth year law student at the Australian National University. She has a keen interest in corporate accountability, and is a contributor to the ANU Corporate Accountability Project. Sophia has lived in Indonesia and the Philippines, and speaks three languages.


 REFERENCES

[1] The Freedom Fund, “The greatest human rights issue of our time”: Theresa May commits to UK Leadership on Slavery (1 August 2016) <http://freedomfund.org/blog/theresa-may-commitment/>.

[2] Transparency in Supply Chains Act 2010 (California); Modern Slavery Act 2015 (UK); French Corporate Duty of Vigilance Law; Proposed Dutch Due Diligence Law. 

[3] The Global Slavery Index, Australia, <http://www.globalslaveryindex.org/country/australia/>.

[4] Joint Standing Committee on Foreign Affairs, Defence and Trade, Trading Lives: Modern Day Human Trafficking, ‘Appendix J: List of Goods Produced with a High Risk of Forced Labour or Child Labour by Country’ <http://www.aph.gov.au/parliamentary_business/committees/house_of_representatives_committees?url=jfadt/slavery_people_trafficking/report/appendixj.htm>

[5] Criminal Code Act 1995 (Cth).

[6] Criminal Code Act 1995 (Cth) Division 270 – 271.

[7] Australian Government, Trafficking in Persons: the Australian Government Response, 2016 <https://www.ag.gov.au/CrimeAndCorruption/HumanTrafficking/Documents/Report-of-the-interdepartmental-committee-on-human-trafficking-and-slavery-july-2015-to-June-2016.pdf>.

[8] Australian Human Rights Commission, Australian Centre for Corporate Social Responsibility and Global Network Australia, Human rights in the supply chains: Promoting positive practice (December 2 2015) Australian Human Rights Commission, 7, <https://www.humanrights.gov.au/sites/default/files/document/publication/2015_AHRC_ACCSR_HR_in_supply_chains_0.pdf>.

[9] Ibid, 19.

[10] Transparency in Supply Chains Act 2010 (California); Modern Slavery Act 2015 (UK); French Corporate Duty of Vigilance Law 2017 (France).

[11] Modern Slavery Act 2015 (UK).

[12] Modern Slavery Act 2015 (UK), s 54.

[13] Home Office, Transparency in Supply Chains: A Practical Guide (29 October 2015) gov.uk, 3, <https://www.gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide>.

[14] Ibid, 5.

[15] Modern Slavery Act 2015 (UK), s 54. (1).

[16] Modern Slavery Act 2015 (UK), s 54. (4) (a) (i).

[17] Modern Slavery Act 2015 (UK), s 54. (4) (a) (ii).

[18] Modern Slavery Act 2015 (UK), s 554(4)(b).

[19] Paul Henty and Simon Holdsworth, ‘Big Businesses and Modern Slavery’ (2015) 4 Compliance and Risk 11, 13.

[20] Home Office, above n 13, 7.

[21] Ethical Trading Initiative, Corporate Leadership on Modern Slavery: Summary Report, November 2016, 7 <http://www.ethicaltrade.org/system/files/gated-files/corporate_leadership_on_modern_slavery_summary.pdf>.

[22] Ibid, 7.