On Monday 30 October I gave evidence to the Modern Slavery Committee of the NSW Legislative Council, regarding the review of the NSW Modern Slavery Act 2018. I spoke about the need for continued attention and resolve to ensure both fiscal and ethical responsibility in public spending. A transcript of the evidence can be found below.
In the world of trophy degrees the business degree is one of the shiniest and students usually learn about profit and loss tax and investment. But this is an Australian first Notre Dame University has introduced a compulsory unit for business students dealing with modern slavery, because 50 million people are trapped in forced or unpaid labour around the world. Associate Professor Martijn Boersma helped design the programme. Martijn welcome. So what was the impetus for this subject?
The final instalment of a research series jointly conducted by nine academic and civil society organisations has been made publicly available. The publication, known as the Good Practice Toolkit, offers businesses crucial insights into human rights due diligence and ways to amplify their compliance with Australia’s Modern Slavery Act (MSA).
Drawing upon data collected over several years, the toolkit examines corporate responses to the MSA and their engagement in human rights due diligence. It zeroes in on two notably weak facets of business practice: stakeholder engagement and supplier relations.
The Toolkit’s main recommendations are:
- Prioritise suppliers with demonstrated respect for human rights.
- Work in partnership with suppliers in designing and communicating expectations.
- Conduct meaningful and sustained engagement with workers and their representatives.
- Engage with relevant stakeholders in the design of policies.
- Use effective grievance mechanisms as an engagement tool.
The Australian Human Rights Institute (UNSW Sydney), Business and Human Rights Centre (RMIT), the University of Melbourne, the University of Notre Dame Australia, the University of Western Australia and Willamette University, in association with the Human Rights Law Centre, the Business & Human Rights Resource Centre and Baptist World Aid, conducted this research. It follows earlier reports, ‘Australia’s Modern Slavery Act: Is It Fit For Purpose?’, ‘Broken Promises’ , and ‘Paper Promises’ .
Addressing modern slavery requires more than criminalising the illegal control of or mistreatment of individuals. It necessitates a comprehensive response to the various forms of modern slavery, including human trafficking, servitude, worker exploitation, child labour, forced marriage, debt bondage, and deceptive recruitment.
Australia has recognised this challenge and has implemented a range of laws, programs, networks, and support services to tackle it head-on. One key component of Australia’s response is the Modern Slavery Act 2018, which focuses on transparency reporting. This legislation mandates large businesses and entities operating in Australia to submit an annual statement to the government, outlining the actions they are taking to address modern slavery risks within their domestic and global operations and supply chains.
To promote transparency and accountability, these statements are made available to the public through the Modern Slavery Statements Register. As of early 2023, the Register has published over 7,000 statements from nearly 8,000 entities headquartered in more than 50 countries. This government-run register is the first of its kind internationally and has already garnered significant attention.
In accordance with the Modern Slavery Act, a review was initiated three years after its commencement, starting on March 31, 2022. The review aimed to assess the effectiveness of the Act in combating modern slavery and explore potential improvements to its framework and administration. It also sought to evaluate whether the law was being taken seriously and effectively implemented. Below you can find a summary of the review and recommendations, as well as the full list of recommendations made.
The latest analysis reveals the disturbing reality that modern slavery continues to imprison millions globally, inclusive of upwards of 41,000 individuals in Australia. In its most recent publication, the Walk Free Global Slavery Index reports that 50 million individuals – with 12 million being children – are ensnared in contemporary forms of slavery, predominantly via forced labour and enforced marriages.
Our consumer-driven society is fuelling this disturbing trade in human suffering. Nations including the United States, England, Germany, and Australia are making substantial purchases of electronics, garments, and textiles, which are largely sustained through forced labour. Sweatshops exploit children by compelling them to toil for about 15 hours daily, remunerating them a mere AU$3, within confines akin to a jail cell.
Senior Lawyer at the Human Rights Law Centre, Freya Dinshaw, points out a shocking fact. She said, “What Australian consumers might not realise is that 80% of the cotton China produces that ends up in clothing that Australians buy, comes from forced labour camps in Xinjiang.” Despite Australia being recognised as one of the top three nations battling modern slavery, its system leaves much to be desired.
Dr Martijn Boersma, an expert on modern slavery, commented, “The Australian Modern Slavery Act asks companies…to address the risks in operations and supply chains and basically report on those actions and the progress they have made.” Nevertheless, experts are calling for Australia to implement even more stringent measures. As Dr Boersma suggests, “What we need is for the government to step in, for example by introducing financial penalties for non-compliance.”
The Australian Modern Slavery Act 2018 (MSA) aims to combat modern slavery in the operations and supply chains of Australian businesses by requiring them to report on their efforts to address this issue. However, the question remains whether the Act is fit for purpose. This new report, based on data collected from a business survey and focus groups conducted in 2022 and 2023, offers new insights to inform policy change and business practices by examining the gaps between policy and practice in corporate modern slavery statements.
Effectiveness and barriers
Our investigation gathered input from respondents regarding the MSA’s effectiveness, best practices for implementing remediation measures, and potential reforms. The report presents evidence of corporate responses triggered by the MSA and stakeholders’ perceptions of its impact. Findings reveal a broad consensus that the current corporate responses to the Australian MSA are generally not benefiting victim-survivors of modern slavery. While the MSA raises awareness in the best case, it may also provide a superficial appearance of compliance for businesses that continue to depend on opaque supply chains and cheap labor without substantive commitment to addressing abuses.
Two critical issues highlighted by survey and focus group participants for improving policy and practices to address modern slavery are enhancing supplier relationships and stakeholder engagement. Respondents identified several barriers to effective remediation, including current procurement practices, low trust between suppliers and reporting entities, and inadequate resourcing by businesses for remediation efforts that would compensate and empower victim-survivors of modern slavery. Remediation is a crucial aspect of addressing modern slavery, and effective processes must prioritise risk to people over risk to business.
Remediation and potential reform
The findings also offer insights into practices that may contribute to more effective remediation of modern slavery, providing valuable lessons for government policy focus and businesses seeking to improve their approach to remedy. Survey data indicates that participants who engage key stakeholders in remediation, such as trade unions, report the most effective approaches. Other essential tools include risk management practices like supplier training and increased transparency from suppliers—practices currently utilised by Australian businesses.
Data from this report and previous research demonstrate a strong desire for MSA reform and the need to incentivise improved practices. A majority of survey respondents:
- Endorse establishing an Anti-Slavery Commissioner;
- Support harmonising the MSA with international standards, such as the UN Guiding Principles on Business and Human Rights (UNGPs), and emerging legislation in other countries;
- Agree that mandating human rights due diligence requirements would lead to improved responses to addressing modern slavery;
- Support a mix of policy measures, including sanctions and incentives (such as disqualification from government tenders, financial penalties, and director liability) to better tackle modern slavery.
There is a clear disconnect between policy and implementation when it comes to addressing modern slavery within the operations and supply chains of Australian businesses. This stems from a lack of transparency in corporate supply chains, which hinders both the detection and resolution of modern slavery issues. To effectively combat this, it is essential to prioritize enhancing supplier relationships and collaborating with key stakeholders such as trade unions. The problem can only be resolved if it is first acknowledged and understood. Gaining better insight into labor conditions in supply chains through engagement with frontline workers is a fundamental and indispensable initial measure in the battle against modern slavery.
All respondents advocated for reform of the MSA to drive company action that benefits victim-survivors of modern slavery, rather than merely promoting superficial compliance with the Act. This report, therefore, serves as a call to action for both policymakers and businesses to work together to enhance the effectiveness of the MSA and genuinely address the issue of modern slavery in corporate supply chains.
The purpose of this resource is to offer a comprehensive overview of global human rights due diligence legislation, including both proposed and enacted laws. Initially created for the Australian Cotton Industry, this document is also valuable for policymakers, industry professionals, civil society, and scholars interested in understanding trends in human rights due diligence, comparing legislation across countries, and estimating anticipated changes for businesses operating in Australia.
The Growing Focus on Mandatory Due Diligence
Over the past few decades, there has been heightened scrutiny on the societal impacts of businesses. International organizations have developed non-binding guidelines and recommendations since the 1970s, acknowledging companies’ responsibility to uphold human rights and implement due diligence across supply chains. However, these voluntary international agreements have fallen short in effectively safeguarding human rights within commercial supply chains. Consequently, governments have experienced increasing pressure to incorporate these guidelines into domestic legislation.
In recent years, there has been a notable increase in country-level due diligence legislation, inspired by guidelines from international organizations. Examples of such legislation include the California Transparency in Supply Chains Act 2010, the UK Modern Slavery Act 2015, the French Corporate Duty of Vigilance Law 2017, and the Australian Modern Slavery Act 2018. Our analysis highlights the rapid development of due diligence legislation, with numerous drafts currently under parliamentary discussion. Critics have voiced concerns regarding the nature of these reforms, citing lenient penalties, weak requirements, and a limited scope of businesses affected. Despite these criticisms, the growing prevalence of domestic due diligence legislation demonstrates its potential to pave the way for significant change.
Key trends in human rights due diligence legislation:
- Increasing robustness: New legally binding regulatory frameworks are becoming increasingly more robust, with the expectation that mandatory due diligence across supply chains will be the end result.
- Expanding expectations: There is a growing expectation for small and medium-sized businesses to incorporate aspects of due diligence, as seen in the Aotearoa New Zealand proposal and Canadian Modern Slavery Act.
- Industry-specific legislation: Laws targeting specific industries have emerged, such as the New York Fashion Act and the US FABRIC Act.
- Broadening scope : Some proposals extend the scope of workplace violations to include worker exploitation, as in the Aotearoa New Zealand proposal.
- Legal redress for victims: Certain laws provide opportunities for victims to seek legal redress, as in the Dutch Child Labor Law.
- Increased fines and penalties: Some acts impose higher fines and penalties, such as the US Uyghur Forced Labor Act and the German Act on Corporate Due Diligence.
These trends indicate a global shift towards stronger and more comprehensive human rights due diligence legislation, emphasising the importance of businesses in upholding human rights and promoting sustainability across their supply chains.
New research out today on political investorism and insider/outsider market lobbying, which analyses shareholder activism and lobbying of market actors. We argue that political investorism in Australia is shaped by our corporate governance rules and market power of superannuation (pension) funds. We identify a category of ‘unnatural insider’ to describe the tactic of traditional outsiders acquiring insider status for political aims. Case studies analysed include market lobbying and threatened boycotts of banks/insurers over the Adani Carmichael coal mine, shareholder targeting of Coles over modern slavery, and superfund divestment campaigns.
The Cotton Research and Development Corporation (CRDC) commissioned research to better understand labour issues along the Australian cotton value chain and to recommend strategies for the industry to explore.
Labour conditions for workers in textile and garment value chains remains an area of continuous concern. While Australian cotton enjoys a reputation as a clean, green crop grown under decent working conditions, once the cotton enters global value chains, all visibility is lost, and sustainable value is diminished. Actors throughout the chain, from brands and retailers to manufacturers, to non-governmental organisations, are working tirelessly to address working conditions in a boundary-less system with fragmented governance. Can fibre producers also play a role?
This animation provides an overview the seven solution approaches that were developed as part of a collaborative project between the Queensland University of Technology, the University of Technology Sydney, and the University of Notre Dame Australia.
The project team members: Alice Payne, Erin O’Brien, Rowena Maguire and Justine Coneybeer (Queensland University of Technology), Timo Rissanen and Karina Kallio (University of Technology Sydney), Martijn Boersma (University of Notre Dame Australia).
The various outputs developed as part of the project can be found here.
Ten years ago, the garment industry’s worst industrial accident – the Rana Plaza collapse in Dhaka, Bangladesh – killed more than 1,100 workers and highlighted the travesty of conditions for millions of garment workers globally.
It spurred action to address exploitation, but for many workers little has changed.
Just in the past few months, Britain’s Tesco supermarket chain has been accused of profiting from the “effective forced labour” of workers in Thailand (making Tesco-brand jeans), while the world’s biggest clothing retailer, China’s fast-fashion brand Shein, has been exposed for rampant human rights abuses.
Such incidents are meant to have been eliminated, as big brands are supposed to leverage their power to effect change in global supply chains. Australia’s Modern Slavery Act, for example, requires companies with more than A$100 million in annual revenue to publicly report on their efforts to ensure their supply chains are free of labour exploitation.
The expectation has been that pressure from consumers and investors will be enough for retailers (who profit the most from driving down production costs) to drive change. Campaigners for better conditions say these requirements are all too often a “fig leaf”, because audits can easily be fudged.
Limited attention has been given to what suppliers can do to ensure their products aren’t associated with exploitation.