Strengthening Australia’s Modern Slavery Act
OPINION | Corporate Accountability
The recent change of government in Australia represents a much-needed opportunity to revitalise Australia’s approach to corporate respect for human rights, including to reorientate the Modern Slavery Act by requiring companies to undertake effective human rights due diligence aimed at preventing harm.
By Christina Hill,
Human Rights Law Centre and Amy Sinclair, Business and Human Rights Resource Centre
The supply chains of the food we eat and the clothes we buy are tied to modern slavery. Yet there is little evidence to suggest Australia’s Modern Slavery Act (MSA) is driving change in company behaviour or improving conditions for workers.
Australia's general election this year ushered in a new Labor government, presenting an obvious and exciting opportunity to revitalise Australia’s approach to corporate respect for human rights, including modern slavery. The three-year statutory review of the MSA, which commenced earlier in 2022, also presents a valuable and specific opportunity for reform – one which should not be squandered.
Recent research evaluating the early impacts of the MSA by Business & Human Rights Resource Centre, Human Rights Law Centre and others found more than half of the reporting entities assessed were failing to disclose obvious modern slavery risks, and less than one in four were meeting legally mandated reporting requirements. Furthermore, less than one in three assessed companies could demonstrate effective action to minimise the risk of modern slavery in their supply chains, such as supporting freedom of association or eliminating recruitment fees. Evidence of these steps was scant in statements. Given this, reporting alone, even if properly enforced, is unlikely to drive the transformative change needed to eliminate modern slavery from corporate supply chains.
Australia’s new Labor government has committed to strengthening the MSA, promising to consult with stakeholders on possible penalties for non-compliance and mandatory reporting on specified issues, such as Uyghur forced labour. It also committed to appointing an Anti-Slavery Commissioner to work with stakeholders to ensure compliance and improve transparency, and to undertaking an audit of the federal government’s procurement procedures. While in opposition Labor had supported a private members bill to ban the import of goods to Australia made with forced labour.
While these are welcome steps, they do not go nearly far enough. We need to aim for more ambitious reforms to move beyond business as usual and achieve real change for people. We don’t need to look far for examples of how this might be done.
The New Zealand Government is currently consulting on a proposal to address modern slavery and worker exploitation in supply chains. The intention is to introduce a disclosure and due diligence-based framework requiring businesses to identify and take action to address risks of modern slavery and worker exploitation.
While Australia’s MSA was the first of its type in the region, it will quickly be outshone by others.
New Zealand’s proposal is markedly more progressive than Australia’s MSA. The MSA only requires larger companies to report on the risks of modern slavery in their operations and supply chains, and actions they may take to address them. There is no requirement for companies to act with due diligence or an obligation to prevent modern slavery. The New Zealand approach is better aligned with the UN Guiding Principles on Business and Human Rights (UNGPs) and the growing consensus on the need to develop legal requirements based on the UNGPs. While Australia’s MSA was the first of its type in the region, it will quickly be outshone by others.
If it is to achieve meaningful change for those at risk of modern slavery, the MSA requires significant amendment. The inclusion of a specific duty on business to prevent modern slavery is needed to make the Act more effective. This would require companies to undertake human rights due diligence (HRDD) to identify and assess salient risks in their supply chains and take steps to mitigate and address them. Workers subjected to modern slavery should also be able to seek redress when companies fail to undertake adequate due diligence. This would bring Australia’s MSA in step with the UNGPs and closer to New Zealand’s more ambitious proposal. It would also mirror the approach taken in the draft Directive on Corporate Sustainability Due Diligence published by the European Commission, and laws in France, Norway and Germany, all of which place HRDD obligations on businesses even though their UNGP alignment could and should still be strengthened.
More broadly, the Australian Government should also move to ban imports made with forced labour – placing the onus onto importers to show their goods are slavery-free. Australia's visa system and labour laws also need to be reformed to stop the systemic exploitation of migrant workers on temporary visas.
Businesses have a responsibility to respect all human rights, not just a subset (even where that subset is particularly egregious). Business processes designed to identify, prevent and mitigate modern slavery should also be used by businesses to identify and address other human rights risks. This points to the need to expand the ‘duty to prevent harm’ and due diligence obligations to all human rights, not just those relevant to modern slavery, at some point. Doing so is the obvious next step for the Australian Government to take. Initiating a public consultation, similar to the New Zealand consultation, would be a useful starting point.
To begin though, the new Australian Government must build on its commitment to strengthen the MSA by transforming it from a weak reporting requirement into a robust, worker-centric law requiring companies to take effective action – including meaningful HRDD – to prevent harm to workers, or suffer the consequences. This would place Australia at the forefront of global efforts to curb corporate human rights abuse and unequivocally establish Australia’s reputation as a nation committed to the protection and promotion of human rights.