By Amy Sinclair
Strategies for ending modern slavery were explored by global political and business leaders at the inaugural Bali Process Government and Business Forum, a regional meeting held recently in Perth bringing together 45 Bali Process member nations. This follows the Australian government's announcement that it will legislate to prevent modern slavery in company supply chains by requiring large businesses to report annually on their actions to address it.
The Global Slavery Index estimates that two-thirds of the 45.8 million people living in slavery worldwide are in Asia-Pacific, many of whom provide low-skilled labour at the production stage of global supply chains for industries supplying food, clothes and electronic goods to Australian consumers. Regional leadership by Australia in addressing modern slavery in corporate supply chains presents a unique opportunity to establish a harmonised approach to addressing this global problem.
In recent years, a number of national governments have taken steps to stamp-out slave labour and clean-up corporate supply chains.
Mandatory reporting and due diligence laws that require companies to examine and report on how they address the issue of forced labour in their supply chains are rapidly emerging as a low-cost, high-benefit public policy tool of choice. New laws have been introduced in the UK, the US, the EU and Denmark requiring companies to report on human rights, including modern slavery. France and the Netherlands have moved to adopt laws requiring companies to undertake mandatory human rights due diligence to ensure their supply chains are abuse-free.
These legislative initiatives to curb corporate-related slavery are to be applauded. Australia now has a unique opportunity to accelerate this global momentum. But we must avoid creating an international mishmash of misaligned laws. Many multinationals are, or will be, required to publish modern slavery statements in a number of jurisdictions. To encourage higher compliance levels by business, a consistent global approach is required.
Transparency laws should require companies to report on similar information. This allows for comparison between approaches and measurement of progress over time. Governments legislating to address modern slavery need to identify the best and most effective reporting components.
But will Australia's proposed new law hit the mark in dealing with modern slavery? When announcing its plans to introduce a modern slavery company reporting requirement, the government also released a public consultation paper outlining its legislative proposals.
A key strength of the proposed new law is that it requires companies headquartered, or operating, in Australia to report on prescribed criteria. This builds upon the UK Modern Slavery Act model which suggests, but does not stipulate, the information to be disclosed by companies in their annual slavery statements.
The current proposals do, however, fall short in three key areas.
First, the proposed law does not include sanctions for companies that ignore the requirement to publish an annual statement on steps taken to address slavery. Second, the new law permits public bodies, including federal and state governments, to continue to engage non-compliant contractors to supply goods and services for public purpose.
Third, the proposed financial threshold, for determining which companies are required to comply, is an annual revenue of $100 million or more. The UK government set a significantly lower threshold of £36 million, approximately $60 million, in its Modern Slavery Act. Whilst the UK Act applies to an estimated 17,000 companies, the current Australian proposals will cover a mere 2,000 companies, severely limiting its potential to drive a race to the top in corporate human rights performance. The proposed threshold is double that recommended by anti-slavery advocates to the Parliamentary inquiry into establishing a Modern Slavery Act, underway since February.
This inquiry has received hundreds of detailed submissions from a broad range of domestic and international stakeholder groups including business, NGOs, trade unions, UN bodies and governments. It has conducted a number of public hearings in different locations around Australia to gather evidence and canvass opinion. Immediately following the government's announcement of its legislative plans, the Parliamentary committee tabled its Interim Report on establishing a Modern Slavery Act in Australia.
The scope of this report goes well beyond the government's current proposals and recommends that three important compliance drivers are embedded in the new legislation.
First, penalties for non-compliance should apply. Second, public bodies should be prohibited from engaging with contractors who fail to report on modern slavery. Third, a list of companies required to produce slavery statements under the law should be published, enabling scrutiny and monitoring of compliance levels.
To eradicate modern slavery from corporate supply chains and ensure the goods we consume are not tainted by it, we must strive for action and accord. This requires a harmonised global approach that holds companies to a consistently high standard, wherever they operate, based on mandatory transparency and due diligence.
It also requires compliance. The inquiry's interim findings include recommendations for three critical compliance drivers. By publishing a list of relevant companies, applying penalties and excluding non-compliant businesses from public procurement opportunities, government can both lead by example and incentivise companies to act on modern slavery.
In taking these steps, Australia can provide leadership and guide a harmonised, regulatory approach to combating modern slavery. We have a unique opportunity to accelerate action against modern slavery and lead millions of workers in Asia-Pacific out of slavery and exploitation. Let's seize it.
Published on Thomson Reuters Foundation News on September 4, 2017.