Wed May 31

Australia's modern slavery law is woefully inadequate – this is how we can hold companies accountable

Written by: Kyla Raby, PhD candidate researching the role of consumers in eradicating modern slavery in supply chains, University of South Australia

A highly anticipated independent review of Australia’s Modern Slavery Act ^[1] has found it has not brought “meaningful change” to the lives of people living in conditions of modern slavery since its passage more than four years ago.

The final report makes 30 recommendations which, if implemented, would mean thousands more businesses need to take stronger action to prevent the goods and services they sell being made with slavery.

These findings come at a time when new global research on the prevalence of modern slavery ^[2] reflects the rapidly growing nature of the issue. It is estimated that, on any given day in 2021, almost 50 million people worldwide were victims of modern slavery. This is an increase of 10 million people from research conducted in 2016.

Despite its name, Australia’s Modern Slavery Act ^[3] doesn’t address the diverse forms of exploitation that can constitute modern slavery. Instead, it aims to combat labour exploitation in the private economy.

It does so by requiring companies and other entities with annual revenues greater than A$100 million to identify how slave labour may be present in their global operations and supply chains. Companies are also required to report on actions taken to ensure they are slavery-free.

According to current government advice ^[4], modern slavery is now so prevalent, there is a “high risk” it may be present in these companies’ operations and supply chains.

However, of the more than 3,000 companies required to report, the review found only a handful have identified incidents of modern slavery. None of these were in Australia. And very few companies have taken steps to remedy the harm caused by slavery when it has occurred or given workers specific protections.

These findings are no surprise to those who have been following the implementation of the Modern Slavery Act, which came into force in January 2019.

Several evaluations of corporate reporting since then have all reached similar conclusions about the weakness of the law ^[5].

Just last month, a coalition of human rights organisations and academics published research ^[6] on the impact of the act involving nearly 90 business groups. It found that, in the best case, it “is generating widespread awareness, but in the worst case, it provides a shiny veneer for a business model that contributes to modern slavery”.

Stronger penalties and greater oversight

The review tabled in parliament last week attempts to remedy the act’s shortcomings. It recommends requiring companies to implement a due diligence system to address the modern slavery risk in their direct operations and supply chains.

This would make it unacceptable for businesses to simply say they are doing something. Instead they would be required to “walk the talk”.

Since its inception, the act has been criticised ^[7] for not including penalties for companies that fail to comply, as well as any mechanism for independent oversight. This has left consumers and investors with the responsibility of holding companies to account.

The review found it is time for these oversights to be addressed. It recommends introducing offences for companies that either fail to report or report false information, as well as an offence for not having an appropriate due diligence system in place.

It also makes several recommendations as to what role a future Commonwealth anti-slavery commissioner could play in overseeing and enforcing compliance with the act. Such a position was introduced ^[9] last year in New South Wales through a state-based Modern Slavery Act.

The view of the Albanese government on such changes is already known. Labor went into last year’s federal election with a promise ^[10] to amend the Modern Slavery Act to impose penalties for non-compliance and to appoint an independent anti-slavery commissioner. In this month’s budget, the government allocated ^[11] A$8 million to establish a commissioner.

The review also suggests enabling the Australian public and civil society to play a greater oversight role by establishing procedures for people to submit complaints about the reporting done by companies under the Modern Slavery Act.

Given complaints from NGOs have been filed ^[12] against companies like Ikea and Amazon under similar laws in Germany, such a change may be an important step towards real corporate accountability.

Addressing the drivers of modern slavery

Although the government’s response to the review won’t be known for some time, it’s clear change is coming.

Our country is at a pivotal point in how we address the sourcing, producing and consuming of goods and services made with exploited labour. To have a chance of reversing, or even just slowing, the proliferation of modern slavery, actions that go well beyond the review’s recommendations are needed.

The review acknowledges that even a stronger, more effective, corporate reporting mechanism alone cannot effectively tackle an issue as complex as modern slavery. And it reiterates the widely held view that the Modern Slavery Act has not addressed any of the drivers of modern slavery such as “poverty, gender inequality, exploitative business practices, weak governance and regulatory inadequacy”.

Truly combating modern slavery will require a courageous government response that addresses these things head-on.