[co-author: Geoffrey Beinart-Smollan]

The Australian Government’s inquiry into establishing a Modern Slavery Act reflects a growing domestic and international commitment to eliminate the exploitative practices of modern day slavery, and recommends new reporting and due diligence obligations for businesses operating in Australia.

Hidden in plain sight

Over 40 million people around the world are trapped in conditions of modern slavery, according to estimates from the Walk Free Foundation and International Labour Organization, including an estimated 4300 victims “hidden in plain sight” in Australia.

Modern slavery—a term that encompasses slavery, servitude, forced labour, trafficking in persons, forced marriage, child trafficking, debt bondage, child labour and exploitation, and other slavery-like practices—exists both at home and abroad; across a range of local industries, and in the global supply chains of organisations and businesses operating in Australia.

Global supply chain reporting

Released last week, the final report of the Joint Standing Committee on Foreign Affairs, Defence and Trade in its inquiry into establishing a Modern Slavery Act in Australia sets out 49 recommendations, including the introduction of an Australian Modern Slavery Act and the establishment of an Independent Anti-Slavery Commissioner.

Similar to the United Kingdom’s Modern Slavery Act 2015, the final report recommends a mandatory supply chain reporting requirement that would require all entities operating in Australia with an annual revenue of over $50 million, regardless of where they are headquartered, to report on modern slavery risks in their global supply chains.

Companies, businesses, organisations, governments and other bodies that meet the threshold will, according to the report’s recommendations, need to publish annual Board-approved modern slavery statements within five months of the Australian financial year ending, detailing:

• the organisation’s structure, its business and its supply chains
• its policies in relation to modern slavery
• its due diligence and remediation processes in relation to modern slavery in its business and supply chains
• the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk
• its effectiveness in ensuring that modern slavery is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate
• the training about modern slavery available to its management and staff
• any other actions taken.

While premised on the supply chain reporting requirements in the UK Modern Slavery Act 2015, the report goes several steps further: recommending a central repository of modern slavery statements, a requirement that the Australian Government only procure from entities that publish a modern slavery statement, and the introduction of penalties and compliance measures for entities that fail to abide by the reporting requirements.

The recommendations are aligned with the ‘Protect, Respect and Remedy’ framework of the UN Guiding Principles on Business and Human Rights. In particular, the requirement to report on due diligence processes relating to modern slavery risks echoes the UN Guiding Principles’ parameters for human rights due diligence—a process that includes assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.

Impacts on the corporate landscape

The report signifies a groundswell of support for measures to address worker exploitation and modern slavery—issues already front of mind in Australia with the recent passage of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, and situated within a growing domestic and international agenda on the human rights risks and responsibilities of businesses.

2018 portends to be a landmark year in the worldwide effort to eliminate modern slavery, with an expanding legislative and regulatory focus on the domestic labour practices and global supply chains of organisations, businesses and other entities operating in Australia.

Pete Talibart, Managing Partner of Seyfarth’s London office and a world-renowned expert on modern slavery, will be authoring blogs on the subject over the coming months and sharing his insights through direct involvement in the establishment of the UK Act.