By JOLYON FORD
An Australian supermarket group sells tuna caught on Thai fishing boats that use forced labour. Whatever the ethics of selling such goods, what does law say? These workers are not employees of the Australian firm, so they are not necessarily its legal responsibility. From garments to chocolate, globalised supply chains mean that we may unwittingly or ignorantly enjoy some things produced, in effect, by modern-day slaves.
On Monday Australia’s federal Opposition announced it would deliver legislation on ‘modern slavery’. It would require larger Australian companies to disclose any knowledge of human trafficking, forced labour and related practices among their suppliers and sub-contractors, and the steps taken to address this.
Internationally, Western firms face similar calls to ‘know and show’ their supply chains: to investigate these methodically, and to certify publicly that they do not involve human rights violations. Such demands for greater corporate accountability and responsibility reflect changing expectations around business’s social role and impact.
However, consumer conduct does not necessarily reflect these expectations. The government knows it cannot leave issues like slavery to ‘market forces’. Yet our own behaviour as consumers may ultimately be a more effective sustained ‘regulatory’ influence than legislative interventions.
Australian corporate transparency legislation in this space would be following a British lead. When the UK enacted its 2015 Modern Slavery Act, Prime Minister Theresa May called modern slavery “the great human rights issue of our time’”. The Act illustrated an increasing tendency to see corporate responsibility partly through the prism of well-established international human rights law frameworks. In 2011 the UN Human Rights Council unanimously adopted ‘Guiding Principles on Business and Human Rights’. These emphasise corporate due diligence in examining human rights risks across business processes, and the state’s duty to promote respect for human rights by private sector actors.
In Australia, the Coalition government has been active on the human trafficking and now modern slavery agendas, including by directly engaging big business. Australia already has strong world-leading legislation criminalising individual involvement in human trafficking and forced labour. The debate now is mainly about including non-criminal due diligence provisions relating to corporate supply chains.
Both challenging and reassuring businesses, mining magnate Andrew Forrest has been instrumental in shaping this agenda. In February the government announced a Senate committee enquiry into slavery-like exploitation and the best form of legislation to address it. Last week the government hosted the UK’s Anti-Slavery Commissioner, and envisages creating a similar office here.
Labor’s announcement this week was roundly welcomed, including by the Business Council. It calls for a bipartisan approach, even though it quite carefully omits any mention of the enquiry or indeed any of the government’s initiatives.
Despite some politicisation even of such apparently unambiguous moral issues, widely-supported modern slavery legislation affecting large business seems unstoppable. Disagreement will probably come on what ‘compliance’ should consist of and whether or not non-compliance should attract a punitive response. Should a company be fined if forced labour is discovered three steps down its supply chain?
The corporate-focused parts of the UK Act simply require firms with an annual turnover above about $60 million to publish a statement of steps taken each year to ensure that human trafficking and slavery are not occurring within their business or supply chains. Technically, a company might ‘comply’ by stating that it has taken no steps. Instead of statutory penalties, the Act relies on a transparency logic whereby markets and consumers exert ‘regulatory’ pressure. The model assumes that firms will pursue due diligence down their supply chain to avoid the reputational risks around false, unverified or incomplete statements. It hopes that firms will see the generic commercial risk-management merits of mapping and better understanding their supply chains generally.
Transparency does not necessarily equate with accountability, and the UK Act is undemanding. Yet at this stage it is not unreasonable to argue that more might be achieved by persuading firms to embrace these issues than by threatening to punish them. Many sectors’ supply chains are hugely complex and difficult to police: we should facilitate cooperative coalitions of business, finance and civil society — fixing problems, not just affixing blame.
Large businesses desire certainty and consistency. They will not necessarily resist new regulation. The UK Act signals that more intrusive regulation might come if business cultures do not change.
While some Asian forced labour has deep historic social roots, much modern slavery is a symptom of globalised economic forces, including our demand for cheaper and faster goods and services. Transparency legislation in developed countries cannot alone fix these structural problems. Fair work and fair trade issues are bigger than corporate due diligence mechanisms.
Addressing modern slavery in our region is not only a job for government or bigger businesses: a critical mass of informed proactive consumers will surely be as significant as law-making. Debate continues over whether 21 or 40-plus million people live and work in slavery-like conditions. Either number is unacceptably high in the 21st century.
Published on Policy Forum on June 8, 2017.