23 August, 2017
Australia is considering whether to adopt modern slavery legislation, similar to that found in the United Kingdom (UK) and California. “Modern slavery” has been identified as including slavery, forced labour and wage exploitation, in voluntary servitude, debt bondage, human trafficking, forced marriage and other slavery-like exploitation occurring today.
A current federal parliamentary Committee inquiry into the matter has received strong interest from a broad group including retailers, financial institutions, governments, not-for-profit organisations, universities, law firms, individuals and other interested parties. Supply chain transparency is a key area of focus for the inquiry, including requirements for relevant parties to report that their global supply chains are free of slavery and human trafficking.
Prior inquiries on modern slavery
This is not the first time Australia has contemplated modern slavery, as the Joint Standing Committee on Foreign Affairs, Defence and Trade undertook an inquiry on the subject in 2012/13. On that occasion, the Committee’s terms of reference were slavery, slavery like conditions and people trafficking, with a focus on Australia efforts to
address people trafficking, ways to encourage international action on the matter, and international best practices.
That Committee issued its report Trading Lives: Modern Day Human Trafficking in 2013.
UK Modern Slavery Act 2015
The UK introduced the Modern Slavery Act of 2015, which is generally considered to be a ground-breaking and comprehensive development in this area (and is endorsed in many submissions to the current Australian inquiry).
Although many parts of the UK’s Modern Slavery Act involved a combination of existing separate criminal legislation for offences including human trafficking and slavery, the Act introduced a new requirement requiring certain companies to publish an annual statement of the steps taken to eliminate the risks of modern slavery within their business and supply chains.
Scope of new Australian inquiry
The enactment of the UK legislation appears to have influenced the Australian Attorney-General, who has asked the Joint Standing Committee on Foreign Affairs, Defence and Trade to conduct an inquiry in the establishment of an Australian version, having regard to the findings of the Committee in 2012/13.
This new Australian inquiry will consider a broader range of issues compared to the earlier inquiry, including:
- The nature and extent of modern slavery in Australia and globally.
- The prevalence of modern slavery in domestic and global supply chains of businesses and organisations’ operating in Australia. This is a key issue of importance for many businesses in assessing and managing their supply chain risks.
- Identifying international best practice employed by governments, companies, businesses and organisations to prevent modern slavery in domestic and global supply chains, with a view to strengthening Australian legislation.
- The implications for Australia’s visa regime, conformity with the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children, as well as federal compensation for victims of modern slavery.
The inquiry will also consider which provisions in the UK legislation have proven effective in addressing modern slavery, whether similar or improved measures should be introduced in Australia, and whether Australia should have its own Modern Slavery Act. To date, the Committee has received 185 submissions. A hearing was held in Canberra on 30 May 2017 attended by Kevin Hyland, the United Kingdom Independent Anti-Slavery Commissioner, with further hearings to follow.
Supply chain transparency
Elements of the UK legislation the Committee is focusing on for adopting in Australia include the UK requirement for businesses and organisations to report on how they ensure their global supply chains are free of slavery and human trafficking.
The UK legislation requires certain commercial organisations to publish an annual statement which either provides information on:
- the steps that have been taken to ensure that slavery is not occurring in the organisation and its supply chain; or
- confirmation that no such steps have been taken.
The statement must be published on the organisation’s website, or where an organisation does not have a website, provided in writing upon request. The provision targets larger corporations based in the UK as set forth in the definition of “commercial organization.”
The format and content of the statement is not mandated but the legislation makes suggestions for content such as, among other things, the organisational structure, business and supply chains, the policies relating to slavery and human trafficking, risks and steps taken to manage the risk for slavery and trafficking.
The statement must be approved by the Board of Directors and signed by a Director. There is no strict timeline to publish the statement but the guidance published with the legislation recommends that the statement is published as soon as reasonably practicable after a company’s year end, and ideally within 6 months.
Interestingly, there is no financial sanction imposed on a company for failing to publish a statement. However, some organisations may be concerned about negative publicity if they fail to publish, and there is currently some lobbying in the UK to introduce stricter sanctions in order to drive compliance. We will be closely watching and monitoring these developments as they are applicable to many types of supply chains.
For further information, please contact:
Anne Petterd, Partner, Baker & McKenzie
anne.petterd@bakermckenzie.com
