On Wednesday, 15 February 2017, the Attorney-General, Senator the Hon George Brandis QC, asked the Joint Standing Committee on Foreign Affairs, Defence and Trade to inquire into and report on establishing a Modern Slavery Act in Australia. Both modern slavery on Australian shores and offshore slavery fall within the scope of the inquiry. This blog examines the need and purpose of an Australian Modern Slavery Act in relation to offshore modern slavery.
Why does Australia need a Modern Slavery Act?
Human rights protection has traditionally been a matter for the State. However, the NGO Global Justice Now has shown that in the list of the world’s top 100 economic entities, 31 are nation states and 69 are corporations. It follows that due to globalisation and the immense economic growth of corporations, it is now well recognised that there is a significant link between the way in which businesses operate and human rights.
For the purpose of the inquiry, “Modern Slavery” refers to slavery, forced labour and wage exploitation, involuntary servitude, debt bondage, human trafficking, forced marriage and other slavery-like practices. The International Labour Organisation estimates that of the 21 million people in situations of forced labour and slavery, 11.7 million are located in the Asia Pacific region, in countries that neighbour Australia. Further, it is estimated by the International Labour Office that slavery in these global supply chains generates about $US150 billion in revenue annually, with $US51 billion in profits generated from forced labour in this region. Due to cheaper production costs, a great deal of labour in these countries is dedicated toward producing consumer goods sold in Western Nations, including Australia.
Given that the purpose of corporations is to pursue profits in the interests of shareholders, as it stands there is little incentive for businesses to ensure that their supply chains are free from modern slavery. This means that companies that cut corners in their supply chains and generate profits as a result of slavery are at a competitive edge over those that invest in the health, safety and reasonable remuneration of their workers. Without adequate regulation in this space, it stands that businesses are not on a level playing field.
Further, while there has certainly been an increase in demand for ethically sourced products, consumers are only able to make informed decisions about purchasing choices when companies are transparent about their supply chains. At present, there is little way of knowing what companies are really doing in their supply chains, and without particular standards of transparency in place, consumers are left to accept the information provided by businesses at face value.
The current laws in Australia
The principal legislation for corporate governance in Australia, the Corporations Act 2001 (Cth), places no obligations on companies or their directors to address human rights in company supply chains.
However, Australia has ratified a number of international human rights treaties relevant to addressing modern slavery. These include:
· The Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children of the United Nations Convention against Transnational Organized Crime (Palermo Protocol);
· The United Nations Convention on the Rights of the Child;
· The United Nations Convention on the Elimination of All Forms of Discrimination Against Women;
· ILO Convention No. 182 on the Elimination of the Worst Forms of Child Labour;
· The United Nations Convention Against Transnational Organised Crime; and
· The United Nations Convention Against Corruption.
There are also voluntary mechanisms for corporations in place, such as the United Nations Global Compact. The United Nations Global Compact aims to align business practices with human rights principles through a voluntary signatory scheme. Businesses that are signatory to the UNGC are provided with guidance and encouragement to bring about human rights best practice. The global compact is not regulatory, and its objectives are aspirational and left intentionally vague, meaning that businesses are given the flexibility to manage how they attempt to achieve them.
Despite the ratification of the above conventions by numerous nations and an increase in voluntary corporate social responsibility schemes worldwide, statistics from the 2016 United Nations Global Report on Trafficking in Persons show that the number of victims of forced labour has increased over the past 10 years. It follows that while some companies may be carrying out adequate human rights due diligence, a large number would appear to be using voluntary human rights mechanisms for the purpose of public relations.
There is evidently a hiatus in the law that requires addressing if Australia is to take its commitment to human rights seriously. A Modern Slavery Act in Australia could not only assist in fulfilling the consumer demand for corporate transparency, but would also be a big step toward bringing Australian domestic law in line with our international human rights treaty obligations.
What would a Modern Slavery Act entail?
A number of other Western nations have enacted legislation that seeks to enforce a degree of accountability and transparency upon companies in order to minimise the risk of slavery in the production of goods and services. It is the Modern Slavery Act 2015 (“the UK Act”) in the United Kingdom that appears to have prompted the Australian parliamentary inquiry into the introduction of similar legislation here.
The UK Act provides that a commercial organisation producing goods and services with value in excess of £36 million must comply with certain disclosure requirements. Companies falling within the ambit of the legislation are required to produce an annual slavery and human trafficking statement. Companies are not required to take any particular measures in relation to combatting modern slavery, however they will be required to disclose when they have taken no measures to ensure human rights protections in their supply chains if this is the case.
There are equally no proscriptive requirements as to what a company’s disclosure statement should address. The UK Act does however provide that the statement may contain information regarding the company’s structure and supply chains, policies in relation to slavery and information setting out the steps the organisation has taken to manage that risk. The statement must be signed by a senior organisation official and published on the company’s website. There are no enforcement provisions or penalties for non-compliance.
A number of submissions to the inquiry have accordingly stated that while the introduction of similar legislation in Australia is certainly something to be applauded, what is needed in Australia is more stringent obligations on corporations, including penalties for non-compliance and directorial responsibility.
By Emily Scott.
Emily is an activist with STOP THE TRAFFIK and was a significant part of the team that prepared STOP THE TRAFFIK’s submission to Australia’s Inquiry into a Modern Slavery Act. She is a Melbourne based lawyer.
You can read the submissions to the Committee from various stakeholders here: