Review of Australia’s Modern Slavery Act: What it could mean for your Business
There are more slaves in the world today than at any other point in history.
50 million to be exact.
These people pick, produce, and process many of the products we consume. They work across all sectors, from construction and hospitality to illegal sex work and other hidden areas of the economy.
The 2023 Global Slavery Index shows that there are over 40,000 people working in modern slavery in Australia – up from 15,000 in 2018.
Who is a Modern Slave?
Modern forms of slavery involve coercion and control. Human trafficking and forced labour are some examples.
It is truly awful.
Modern slaves are forced to work under threatened or actual physical and/or mental abuse, and they may be trapped by debt or financial bondage. They cannot speak up and have no freedom of movement.
The most vulnerable members of society – migrants, students, children, domestic violence victims – are primary targets of modern slavery.
“It might seem like a foreign concept to many, but modern slavery is all around us. It’s happening right now on farms in regional NSW, in shops and construction sites in our cities – perhaps even in a house down the street.”
— Dr James Cockayne, NSW Anti-slavery Commissioner
Ending Modern Slavery in Australia
There has been considerable recent activity supporting the government’s commitment to eradicating modern slavery.
May 2023: Statutory review of the Modern Slavery Act 2018 (Cth)
The consultation process for this review began late last year. The report was tabled in Parliament in May. More on this below.
May 2023: 2023 Global Slavery Index
Walk Free published the 2023 Global Slavery Index. It revealed that there are 41,000 people in Australia trapped in various forms of forced labour.
June 2023: NSW strategic plan for modern slavery
The independent NSW Anti-slavery Commissioner released a strategic plan for 2023-26 ‘Working Together for Real Freedom’ at Parliament House. By doing so, NSW has taken a global lead in addressing modern slavery.
Key elements of the plan:
Removing products of modern slavery from public procurement
Establishing a support and referral hotline for those in modern slavery
Equipping frontline workers to identify and report modern slavery
“We see women and children made vulnerable through domestic and family violence; cleaners and security guards working in office blocks, caught in the grip of debt bondage; girls forced to marry here in NSW or overseas; and people living with disability who are exploited in segregated workplaces or in institutional care.”
— Dr James Cockayne, NSW Anti-slavery Commissioner
June 2023: Modern Slavery Conference in Melbourne
The Attorney-General's Department held the 2023 Modern Slavery Conference with the theme ‘Taking Action Together’. There were 450 attendees across various sectors, and prominent speakers included the Attorney-General Mark Dreyfus, Foreign Affairs Minister Penny Wong, and Assistant Minister for Social Services Justine Elliot.
Is the Modern Slavery Act Working?
To answer this question, the government has released the ‘Report of the statutory review of the Modern Slavery Act 2018 (Cth): The first three years’.
The review was by Professor John McMillan AO. It was informed by public consultation with over 280 government and non-government organisations and 136 written submissions from domestic and international stakeholders.
The review considered three questions:
Can a law such as the Modern Slavery Act be effective in combatting modern slavery?
Could the Act be more effective if changes were made to how it is framed and administered?
Is the law being taken seriously?
According to Deloitte, the review identified three primary areas of weakness:
The standard of reporting is variable
The reporting obligation is not properly enforceable
The reporting process is at risk of being drowned by a sea of large and incompatible statements
Key recommendations
Of the 30 report recommendations, seven most signification ones include:
Lowering the reporting threshold from $100 million revenue to $50 million
Introducing penalties for companies that fail to report without reasonable excuse, submit a report that knowingly includes false information, or fail to implement an appropriate due diligence system in place to assess modern slavery risks
Requiring companies to implement a due diligence system that goes beyond basic reporting and requires them to take effective action to identify and assess modern slavery risks and track their performance in addressing those risks
Introducing a federal Anti-slavery Commissioner to further guidance materials and oversee compliance with the Act
Allowing the Minister or Anti-slavery Commissioner to declare high-risk locations, industries, products, or suppliers that companies must consider and report.
Requiring all modern slavery statements to include a coversheet that addresses specified matters to assist standardisation between statements
Updating and expanding the current Guidance for Reporting Entities, including for compliance with reporting requirements, definitions of key terms, and a template for signature and approval requirements
Read the full report below:
What should businesses do?
The Government will now consider the recommendations made, although it is highly likely that many will be adopted – the Attorney-General has already confirmed funding to appoint Australia’s first federal Anti-slavery Commissioner.
Meanwhile, businesses should evaluate their current modern slavery reporting to ensure they are prepared for a potential strengthening of the Act.
Ask yourself:
What is your business’ revenue threshold, and will your business have to report if it is lowered to $50 million?
Would a lower reporting threshold impact any key suppliers or customers?
Is your modern slavery reporting comprehensive and up to date?
Does your reporting include a transparent risk disclosure?
Are your modern slavery risk responses supported by robust human rights due diligence?
What actions are you taking to address modern slavery risk, and how are you addressing their effectiveness?
What actions are you taking to address modern slavery risk, and how are you addressing their effectiveness?
The last question is a particularly important one.
As seen in recommendations 2 and 3 above, businesses could face penalties for not appropriately managing modern slavery risks.
Risk-prone industries include those that use unskilled labour, seasonal labour, short-term contractors, or outsourcing. The recruitment industry is a pertinent example.
Further, businesses should be aware of produce and service risks such short delivery time frames and sourcing products from high-risk countries. Consumers can also play a meaningful role in this regard.
Addressing Modern Slavery Risks – Where to begin?
Demonstrating supply chain transparency can be an incredibly tedious process.
“The focus on supply chains requires businesses to be careful in addressing not only their operations but those of suppliers and contractors and whether they have poor governance structures, a track record of human rights violations or poorly managed auditing processes.”
— Certex, from ‘Modern Slavery Reporting Legislation’ article
Tougher legislation and harsher penalties are on the way.
Fortunately, Certex can help you understand and meet your legal obligations with our iEthics Program – part of our iSuite Risk Assessments. We can support you to develop a due diligence, risk management system that identifies and evaluates your modern slavery risks, ensuring you are compliant with the Act.
Avoid penalties for non-compliance. Mitigate modern slavery risk. Together, let’s work towards a world where freedom is a right enjoyed by everyone.