On 28 June 2018, Home Affairs Assistant Minister Alex Hawke introduced the Modern Slavery Bill 2018 to the House.
After months of deliberation and public consultation, Australia had begun the process of passing a Modern Slavery Act (MSA) in line with international obligations and expectations.
ICS has been following the development of the MSA, and submitted recommendations to the government on the importance of updating Australia’s laws, as well as publishing an article in the ABC.
Below is a summary of events and ICS’ involvement since early 2017.
According to the International Labour Organization (ILO)2 over 21 million people remain in forced labour worldwide. Over 11.5 million of these are in Australia’s neighbourhood, the Asia-Pacific. This modern slavery generates a staggering US$51 billion in our region alone; a figure which explains the slave-economy’s enduring existence.
In mid-February 2017, Attorney-General George Brandis asked the Joint Standing Committee on Foreign Affairs, Defence and Trade to inquire into establishing a Modern Slavery Act in Australia.
The inquiry’s final report Hidden in Plain Sight, was handed down in December 2017.
The Institute for Civil Society recommended to the inquiry that Australian business with turnover in excess of $60 million should be required to:
- investigate periodically whether there are any slavery-like conditions in their own enterprise or in enterprises in their supply chains;
- determine what steps, if any, the business will take in relation to the results of the investigation;
- annually make a public report describing:
- the investigations undertaken;
- what, if any, evidence was found of slavery or slavery like conditions and in relation to what places, enterprises and persons;
- what the steps the business intends to take to remove, limit or stop identified slavery or slavery like conditions in its enterprise or supply chain; and
- what steps the business has taken since it last reported to remove, limit or stop identified slavery or slavery like conditions in its enterprise or supply chain.
- A central, independent repository should publish the anti-slavery reports of all Australian companies that are obliged to report.
- Public sector oversight of supply chain investigation and business reports. For example, a departmental Secretary or statutory Commissioner should be appointed.
- ICS recommended that the Commonwealth Procurement Rulesbe amended to include a requirement in government procurements for contracts over $1 million that tenderers must demonstrate that slave-like conditions did not affect the goods or services to be supplied under the government contracts. This could have been achieved by obligating companies seeking government contracts over $1 million to provide an anti-slavery statement like that required of larger businesses under the proposed MSA.
Committee’s report and extensions of the UK’s MSA
The final inquiry report, Hidden in Plain Sight made 49 recommendations. The most significant included:
- The establishment of a Modern Slavery Act in Australia
- The establishment of an Independent Anti-Slavery Commissioner
- Mandatory supply-chain reporting by entities with a revenue threshold of $50 million
- Increased support for victims of modern slavery
While broadly aligning with the UK’s MSA, the committee also recommended some stricter regulations.
Annual anti-slavery statement requirements
Under the UK MSA, entities over the £36 million reporting threshold must provide an anti-slavery statement, however the contents of this statement are largely left to the organisation to decide. This policy is based on the view that civil society will hold entities to account based on the contents of their reports. If the public is not satisfied with the details of a report, or the actions organisations or companies are taking to address modern slavery, they will theoretically pressure said entities to be more forthcoming and proactive.
Under the proposed Australian MSA, however, entities asked to produce an anti-slavery report would have minimum reporting requirements imposed upon them. Going further than the UK, the committee recommended that the government prescribe the following reporting requirements, rather than merely suggest them:
- 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; and
- any other actions taken
As one submission to the inquiry explained, unlike the UK MSA, the prescribed contents of the report would lead to greater transparency:
[W]ithout prescribed reporting requirements there is a lack of consistency in reporting and this makes it difficult to effectively evaluate company statements against one another. It essentially defeats the purpose of making the statements public. So statements have to be clear, consistent and comparable to enable civil society and government to effectively monitor company action and to enable consumers to make informed choices.
ICS welcomes this extension of the UK MSA, since it will see organisations and companies having to comply with strict and clear criteria. The mandated reporting criteria broadly aligns with ICS’ own submission, which originally called for a 2-3 year trial period with suggested reporting requirements. ICS submitted that if during the trial period entities were found to be failing to provide suitable, actionable detail in their reports, ‘Sanctions could be introduced to require evidence of proactive steps being taken by companies to address slavery in their supply chains.’
Another point of contrast to the UK MSA was concerned with public procurement policy. A submission to the inquiry argued:
There is an onus on the government to be the model citizen and to be demonstrating best practice in [procurement] … the government has the opportunity to provide the incentive of being able to contract to government by including considerations of slavery in its procurement guidelines.
ICS’ own submission suggested that:
Commonwealth Procurement Rules be amended to include a requirement in government procurements for contracts over $1 million that tenderers must demonstrate that slave-like conditions do not affect the goods or services to be supplied under the government contracts, including through the supply chain for those goods or services.
Agreeing with this and similar views, the committee recommended that:
- the Australian Government introduce a requirement to only procure from entities that complete a modern slavery statement.
- that Commonwealth public bodies over the prescribed threshold amount, including the Australian Government, be required to provide a modern slavery statement.
- the Australian Government encourage state, territory and local governments to introduce requirements to only procure from entities that comply with the modern slavery supply chain reporting requirement, as well as to submit modern slavery statements.
These recommendations also align with ICS’ submission, which highlighted international examples of best practice, including in the United States.
Modern Slavery Bill 2018
The introduction of the Modern Slavery Bill 2018 in Parliament in late June shows the government’s clear intent to legislate for a Modern Slavery Act. However, and while details are still emerging, early indications are that while there are important inclusions, in some ways the Bill falls short of the recommendations handed down in Hidden in Plain Sight.
Included in the Bill:
- Reporting requirements for over 3,000 entities to publish modern slavery statements
- $100 million revenue threshold for reporting
- Mandatory criteria for reporting
- Slavery statements to be made available for public access
Also proposed, and in a ‘world-first’, the government includes reporting obligations for government, based on the view that its ‘procurement is not immune from modern slavery risks’.
Despite these positive steps, the Bill does not call for the appointing of an Independent Anti-Slavery Commissioner. Instead, $3.6 million is allocated for the establishment of a Modern Slavery Business Engagement Unit—within the Department of Home Affairs—which would have oversight of businesses’ reporting obligations. This fact, along with no penalties for entities which fail to comply with reporting requirements, has led some in the Opposition to label the Bill ‘toothless’.
While the details of the government’s Bill must be considered in more detail as they are scrutinised by Parliament, ICS welcomes its introduction as a crucial step in the right direction.