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.
MARTIJN BOERSMA, Director, Modern Slavery and Human Trafficking postgraduate programs, University of Notre Dame Australia, affirmed and examined
The CHAIR: Good morning and welcome, Dr Boersma. Thank you for making time to give evidence before the Committee today. Would you like to start by making a short statement?
MARTIJN BOERSMA: Thank you for having me here today and giving me this opportunity to provide evidence. Public spending is a matter of considerable magnitude, and with this size of public spending comes the inherent risk of links to labour exploitation and human rights violations. Yet the size of this spending also can be used as a force for good, enabling government bodies to leverage their purchasing power and champion the cause of human rights and ethical labour practices.
Both the UN Guiding Principles on Business and Human Rights and the Sustainable Development Goals have laid down a clear mandate for governments around the world to uphold human rights in their procurement processes. The New South Wales Government, recognising the importance of this mandate, has taken commendable steps through the introduction of the New South Wales Modern Slavery Act, which underscores its commitment to transparency, accountability and integrity in public spending. While these efforts must be commended, it should also be acknowledged that we live in a fast-changing world, which means that it is imperative to continually adapt and evolve. Learning from the Commonwealth experience, it is clear that the current state of modern slavery reporting and risk assessment leaves a lot to be desired. We must discourage entities that need to report from taking a mere compliance-based approach to one that truly embodies the spirit of the Act, ensuring substantive action through meaningful risk-mitigation steps, transparency about progress and/or lack thereof, and producing useful data which is publicly available.
Additionally, accountability should not merely rest at the apex of the supply chain, but cascade through every layer of the supply chain. By embedding stringent anti-slavery protocols at each level, we can combat risks and enforce standards that reflect that strong commitment. We must also recognise and address the varying degrees of exploitation that individuals endure, from poor working conditions all the way through to forced labour. In conclusion, the New South Wales Modern Slavery Act 2018 has created a very solid foundation, but efforts made towards ensuring both fiscal and ethical responsibility in public procurement require continuous attention and resolve.
Ms JENNY LEONG: Thank you, Dr Boersma, for your submission. I wonder if you can speak specifically to the recommendation you make around ensuring or encouraging due diligence around a range of exploitative practices. Looking at the idea of how minor labour rights might be reported, do you see that there’s scope within this Act to potentially expand the remit of the Act to allow that, given the indications that those minor labour rights infringements can have on potential modern slavery risks?
MARTIJN BOERSMA: Yes, absolutely. I think it is commonly accepted that there is a continuum of exploitation that exists. The UK, in their reporting guidelines for their Modern Slavery Act, acknowledge that, and the Commonwealth Act acknowledges it as well. From my experience in looking at how Australian entities have been reporting under the Commonwealth Act, there is a bit of a binary approach: Either we see modern slavery or we don’t really see anything at all. With the acknowledgement of the fact that there is a broad spectrum of exploitation occurring and the fact that people are not once and for all fixed on that spectrum—they can move along that spectrum. Conditions can change and working conditions can deteriorate.
By not acknowledging that spectrum, and by overlooking what might be called lesser labour abuses, you might run the risk that a particular entity that does a risk assessment of the supply chain would not necessarily find anything that they would classify as forced labour, thereby overlook a particular risk factor, which in combination with other risk factors and in combination with time may eventually lead to worse kinds of exploitation. I think it’s really important—and again this is learning from experience, through the evidence and the research that’s been put into the Commonwealth Act. We do need to acknowledge that spectrum and look at what might be termed lesser labour abuses, whether that’s wage theft, whether it’s unreasonable productivity rates or a range of different entitlements not being paid such as super et cetera. Those can all cumulatively and over time result in worse types of exploitation. I think that’s very important.
Ms JENNY LEONG: Given your expertise and research in this area, do you have any thoughts particularly on the intersection between both housing and homelessness risks and visa and migration risks— around the limits that that poses or the potential risks that poses to people not wanting to report instances of modern slavery, or how that interacts? I’m interested in any thoughts or reflections you might have on that, and any guidance you might want to provide, now or on notice, on where we could look to in terms of good examples al best practice models on how the New South Wales Government might approach the intersection between those elements.
MARTIJN BOERSMA: That’s a very good question. I think that this really touches on what we just discussed in terms of, potentially, conditions deteriorating, and the fact that people might experience precarity for a range of different reasons, whether that is homelessness, whether that is through the fact that they’re temporary migrants, or through the fact that their visa may or may not have expired and they’re still working for a particular employer et cetera, with the balance of power shifting towards the employer, obviously, because they’re breaching their visa conditions. Those are really good examples that need to be taken into consideration, because again that adds to the precarity that a person can experience. Someone who might be here, who might be living in a share house, who is still on a temporary visa that’s valid in a particular employment relationship, might next month see themselves booted out of the share house, find themselves breaching their visa conditions et cetera. Obviously that then severely adds to the precarity they experience. Any sort of risk factor that an entity might have identified before that has obviously then dramatically changed. So in terms of the first part of your question and the necessity to address that, there is a dire need to address that. But in terms of the second question—best practice examples— I think there are not too many out there, so I would like to take that question on notice and get back to you at a later stage on that.
The Hon. Dr SARAH KAINE: Thank you, Associate Professor Boersma, for being here today. I should declare to the Committee that I do know Dr Boersma. We were colleagues for about a decade at UTS. It is lovely to see you again. I just wanted to ask you a question. We’ve been talking a bit about enforcement this morning, and enforcement powers or lack thereof, and how we get there. I wondered if you have any views on the way in which the New South Wales Act could be enforced, particularly with the aim of increasing compliance and substantive action to reduce risks.
MARTIJN BOERSMA: Yes, very good question. Again, we can look to the Commonwealth experience for learnings. The idea there is that there is some sort of market-based enforcement model where consumers and investors might take away their money if a company or an entity does a poor job of reporting. Conversely, the idea is that a reporting entity will be rewarded if they do a good job. Investors will flock towards this particular entity and so will consumers. From the UK experience, as well as the Australian experience with the Commonwealth Act, we see that that’s not the case. Obviously in New South Wales it’s different. Here, obviously, the entities are not necessarily public-facing to the degree that the entities reporting under the Commonwealth Modern Slavery Act are. So a different type of enforcement mechanism is warranted.
From my perspective, public procurement is, obviously, always walking a fine line between getting bang for your buck and doing it ethically. But one of the suggestions I made in my submission was to look at ways in which there could be, potentially, a procurement connected policy, which makes compliance or the demonstration of compliance with labour standards and demonstration of adherence to the human rights due diligence framework a more heavily weighted criterion in potentially awarding a government contract. Obviously government contracts can be quite lucrative, so the purchasing power that a government has there is quite significant. Also, working on the basis that a lot of entities getting awarded government contracts might do so on a repeated basis, they would have longer term relationships with the Government.
I think instilling or creating that criterion for labour standards compliance on rights and due diligence in awarding a contract in the first place, and providing that as a basis for an ongoing relationship with a supplier, would also reserve them the right to not award a contract on the basis of not having those provisions in place. That will be a good enforcement mechanism, which brings a bit of a carrot as well as a stick approach to that.
The Hon. Dr SARAH KAINE: Could I ask a follow-up. It goes to one of your previous answers. Are you able to provide, on notice, any of your own research or any other on the idea of this market-based enforcement and perhaps where it hasn’t worked? Particularly you cited the UK as an example. If you could provide some of that for the Committee, I think that would be really helpful.
MARTIJN BOERSMA: Yes, absolutely. I’m happy to do that. I can quickly already give you some figures.
The Hon. Dr SARAH KAINE: That would be great.
MARTIJN BOERSMA: So when the UK Modern Slavery Act came into force in 2017, in the first round of reporting around 43 per cent of companies on the London Stock Exchange didn’t bother to submit a report, and around half of companies that were in the top 100 suppliers to government also didn’t submit a report. So even if the potential repercussion came from government, as the contracting party, even in those instances there wasn’t enough fear amongst those companies of noncomplying. Unfortunately we’ve seen that trend continue in Australia as well. A recent business project that I did that ran from 2022 to earlier this year found the same findings, sadly. But I’m happy to provide those bits of research, absolutely.
The Hon. Dr SARAH KAINE: That would be great.
The CHAIR: Are you able to elaborate on that in the Australian context, as you’ve just indicated?
MARTIJN BOERSMA: Yes.
The CHAIR: I think the UK Act is quite different. Well, you can comment on that if you like. But just take us through the impacts so far on the Australian procurement scene and reporting. You are making the point that the name and shame isn’t enough, so I’m interested in the data on that. I’m just mindful, of course, that we’re almost at the start of the process here, so surely we’ve got to keep that in mind as well. So just go through what your data is, perhaps, on the Australian experience.
MARTIJN BOERSMA: What we did, together with a team of colleagues from many different universities around Australia, under a Commonwealth grant given to us by the National Action Plan to Combat Modern Slavery, is we looked at four high-risk industries and we gathered the statements of 102 entities to look at the degree to which they had substantively complied but also technically complied with the Act. We found that around about three in four companies that we looked at had not actually complied with the basic reporting criteria of the Act. But then when we started to delve deeper, when we tried to look at what would constitute meaningful compliance, we found even more underwhelming results from that. For instance, companies that were sourcing garments from China—obviously we know there have been widespread reports of State-sponsored forced labour in Xinjiang.
We found that over half of the companies sourcing garments from China that were required to report didn’t mention Xinjiang as a risk factor in their annual modern slavery reports. So that is obviously one of the best-known examples of forced labour, which was glaringly overlooked. We found that in other sectors as well. We looked at the Thai seafood industry as well, we looked at garment manufacturing, we looked at the production of gloves and we also looked at horticulture. In many of these industries the types of reports that we all sometimes see in the media and that you can read pretty much almost on a weekly basis were not mentioned in their own reporting statements. I think that the awareness amongst reporting entities about risks in new industries, and definitely the degree to which they are transparent about those risks, is not really something to be encouraged about.
The CHAIR: Can I follow that up. Given that they have made those reports, is there not a mechanism for that to be called out, or is it just simply reliant on informed people like yourself trying to make that information public? Is that a weakness in the Commonwealth legislation?
MARTIJN BOERSMA: Yes, I would say so. I think the naming and shaming is not really working. Tragically, the people who are looking at modern slavery reporting statements are just people like myself and fellow academics, who scrutinise these and try to make some waves by potentially partnering with other civil society organisations, producing a report and trying to get a media headline, but I don’t think there is an active fear. One example is we did a second round of analysis with the initial 102 statements, and a number of companies that we analysed in the first round just didn’t bother to submit a report in the second round at all. Clearly, there was no real fear there of some sort of backlash.
We reached out to a number of those entities as well and didn’t get a response. So the naming and shaming approach, and the reliance on the market to balance the financial interests with the social interests, is not something that seems to be working. Clearly, the report that has been tabled to the Federal Parliament now, with the recommendations of Professor John McMillan, have suggested fines. I think I’m partly in favour of that. The problem there is obviously that you might find a shift towards more technical compliance in order to avoid the fine, rather than substantive compliance that is actually based on meaningful action. But at least the naming and shaming approach, in my opinion, and as the research shows, doesn’t seem to be working very well.
The CHAIR: Is there anything that we should be considering in the New South Wales Act or the role of the NSW Anti-slavery Commissioner that would, if you like, strengthen the impact of naming and shaming within the current or proposed changes to the Commonwealth Act? You might want to take that on notice and think that through.
MARTIJN BOERSMA: I think that, again, coming back to the idea of making compliance with human rights due diligence frameworks and doing risk mitigation, making that a more heavily weighted criterion in awarding government contracts—that can be a very persuasive lever. If the naming and shaming would be accompanied by—for lack of a better term—a blacklist or a list, at least, of entities who are not compliant and who are not eligible to potentially receive government funding, I think that would add some gravitas to the naming and shaming, with not just having a name on a website, but also having a real-world consequence attached to that.
The CHAIR: You’ve made that point about the connected policy before so thank you for that. I apologise, I butted in.
The Hon. AILEEN MacDONALD: No, you’re all right. Doctor, just following on from the Chair, I think by the Government implementing the legislation and then going through the procurement process and demonstrating its commitment and promoting ethical supply chains, would that not then influence the private sector to also have a greater corporate responsibility? And then, perhaps in doing so, rather than naming and shaming, they can do it themselves, saying, “We are doing this,” and promoting it themselves. It can be a two-way thing rather than just naming and shaming. The ones that are being responsible can also add to that discussion more.
MARTIJN BOERSMA: I think it’s very important for government to lead by example. I think that if you’re going to ask private entities to take certain steps to address modern slavery, then certainly in terms of public spending you have a responsibility to show how it’s done. The difference between the public sector and the private sector here is that for the private sector we’re told there is a business case to do this. The business case is that it will attract investors or detract investors, and the same for consumers. Obviously with public spending, that doesn’t really happen.
With public spending you rely more on the moral case by showing and leading the way on how it’s done and practising what you preach. I think that is a very important element there as well. I think that if we are to make strides in the private sector as well in the next years—and I take the point of the Chair as well saying that we’re early on in this journey. Again, if we see the New South Wales Government and public procurement making great strides, setting good examples, introducing guidelines and criteria and formats, contract clauses that can stand up as best practice, then we give off a really good signal to the private sector as well.
The Hon. AILEEN MacDONALD: By knowledge sharing and building capacity and, as you said, developing best practice, so then we adjust our supply chains and our work environments so that they comply with the criteria. My mind then turns to the criminal aspect of modern slavery and how to address that, because once you start getting the community aware that modern slavery isn’t what we’ve always imagined it to be and that it can be in the supply chain. But as we start seeing that working through, how do we then go to the criminal aspect of it?
MARTIJN BOERSMA: I think that Commissioner Cockayne was here obviously earlier this morning and referred to the development of a hotline. I think it is important that we also communicate to mainstream media what modern slavery is. It’s oftentimes misidentified. And there is also a downside with a potential hotline as well. In the United States, for example, there have been a number of false positives occurring: people, for example, being on flights being flagged as being potentially trafficked and that was not the case, which resulted in lawsuits and the like.
But oftentimes even in mainstream media I see reports using the term “modern slavery” and the offence described is actually not typically modern slavery. So we need to be cautious of that as well in terms of identifying and then referring and potentially prosecuting. Because, again, there is a lack of understanding oftentimes amongst people what constitutes modern slavery and forced labour and the different types of exploitation that occur there, and that is very important. But I’m pretty sure that Commissioner Cockayne will obviously have the expertise in his team to deal with those incoming hotline calls when they do come in.
The Hon. ROBERT BORSAK: Dr Boersma, in your paper you talk about the continuum of exploitation. Do you want to just elucidate around where, say for example, low wages, long working hours, inadequate health and safety measures move along that continuum to become slavery?
MARTIJN BOERSMA: Yes, I’m happy to. I can give an example of a research project that I was involved in from 2019 to 2022 which focused on the Australian commercial real estate cleaning supply chain. It’s typically an industry with a low barrier of entry. You don’t have to have many qualifications, if any, to become a cleaner. There is a large transient workforce there. People are oftentimes international students. And those are immediately already two risk factors that you can identify. What might then add to that is, for example, what we’re currently experiencing, which is the cost-of-living crisis.
People who are already working in an industry with a low barrier of entry with, I suppose, low wages, with unpredictable hours sometimes, they might then also experience a high cost of living which might then, for example, lead them to breach the number of hours that they can work a fortnight, which is limited for international students. At that point, they are in breach of their visa conditions, at which stage a nefarious employer might say, “Hold on a minute. I could dob you in but what we can do is actually you work a few more hours or I pay a little bit less or I start to pay you cash in hand. You have to work that site, that site.” The power balance shifts to a degree that, again, a nefarious employer could take advantage of them and almost hold some totalitarian sway over these people because they are so in fear of being referred to immigration and subsequently deported. That is one example of how someone might move along that continuum quite swiftly.
The Hon. ROBERT BORSAK: Do you think organised representation where those things are discovered would play a role?
MARTIJN BOERSMA: Yes, absolutely. As part of that research project, that is a multi-stakeholder initiative where many different stakeholders from the cleaning industry had come together to address this issue, and a number of different actors are involved. There is the Fair Work Ombudsman, the peak bodies in the cleaning industry, cleaning contractors, building owners, but also the trade union representing cleaners, the United Workers Union. I suppose having a collective of workers—and there are many different ways in which they can form a collective—is very helpful in opposing that power imbalance with an employer, helping them be more across their rights, helping them access potential support channels as well and dealing with that power imbalance as well, yes.
The Hon. ROBERT BORSAK: We heard evidence earlier that the commissioner can obviously, I guess, name and shame, but what other due diligence processes should we have available to us to try to make sure that people who have moved along that low wage continuum into the slavery area—how we could best address that from a diligence point of view?
MARTIJN BOERSMA: I think the commissioner referred to that this morning as well in the approach that his office is taking towards dealing with this and having a strategic approach by saying, “We’re actually identifying the high-risk industries and the high-risk sectors first, because obviously resources are limited and we cannot be everywhere all at once.” So dealing with those highest-risk industries—I believe he mentioned IT as well as one of them, energy supply chains as well—is a good way of strategically allocating resources to deal with that because the evidence in those industries of labour rights abuses are rife. If we start there and then apply the international gold standard human rights due-diligence frameworks, which are slowly but surely developing, that would be a very good place to start.
The CHAIR: Can I just follow up on that? You, Dr Boersma, described a study that you are involved in between 2019 and 2022 where you were able to document people who had moved along that continuum. Is that correct? Did I understand that correctly?
MARTIJN BOERSMA: Yes, so what we did is we, as part of that research project, interviewed stakeholders along that entire supply chain. Again, this is a very problematic supply chain which has had issues of labour standards noncompliance for decades and hence all stakeholders coming together. As part of that specific project, we didn’t directly interview people who were trapped in modern slavery but we had many worker engagement meetings that we attended and observed where we found all the classic risk factors that people would experience if they moved along the continuum. We did have at times also reports of people having their ID being confiscated or other unreasonable and illegal demands being made of them. For example, if they would want to move to another building site, they would have to pay the contractor to move to a different building site et cetera et cetera.
The issues that we found—and the whole point of that research project was to find labour standards not compliant in the supply chain—were rife. We didn’t find the worst types of noncompliance; that’s potentially also because cleaning contractors would voluntarily put forward sites to be audited, so you would have some sort of discretion there and would not necessarily put forward a site that you would think would be most likely to have high signs of noncompliance. We found across the entire spectrum not the worst kinds, but we found all sorts of noncompliance occurring. Again, in combination those types of noncompliance can cause worse types of exploitation.
The CHAIR: Is that information published?
MARTIJN BOERSMA: Yes. If you’re desperate to read some obscure journal article, I’m happy to forward that to you as well.
The CHAIR: I would appreciate seeing your research on that because I think that sounds like a very precise piece of work around describing that continuum, which I think would be useful. Thank you.
MARTIJN BOERSMA: No problem.
The Hon. Dr SARAH KAINE: Dr Boersma, you talk in your submission about stakeholder engagement. We hear a lot about stakeholder engagement across government and what we do. Can you describe what you understand to be meaningful stakeholder engagement and what you think would be appropriate in this area?
MARTIJN BOERSMA: First off, I need to commend Commissioner Cockayne’s office for the way he’s approached this—the way he’s put together an advisory council that includes evidence or a survivor voice. There’s a whole range of different people from different backgrounds providing input there. I think it’s pivotal that the parties that are ultimately subjected to any policy, criterion or model contract clause or whatever are ultimately also involved in the development of those clauses because they’re ultimately the people who need to comply with that. From researching the cleaning industry, it’s really important that you have these people on board at an early stage so that you’re able to overcome any challenges that they might have identified in terms of them not being able to comply with something.
Secondly, in addition to that, I think that it’s very important to have sustained, ongoing stakeholder engagement. I think that what I’ve seen in the research that I’ve performed of colleagues in the private sector under the Commonwealth Act, a lot of the stakeholder engagement is I suppose like a one-off-type engagement. It’s not really sustained engagement. Obviously, as we’ve all acknowledged and the Chair acknowledges as well, we are at the start of a journey. We’re still finding how this works and how we can make it more efficient. How we can make it work better, we need to have continuous engagement with those people who are subjected to all these different requirements as well. It can’t be a one-off, set-and-forget exercise, which will ultimately lead to more technical compliance but rather ongoing, sustained engagement.
Ms JENNY LEONG: If I can just follow up on that briefly, Dr Boersma. I’m happy for you to take this on notice. Do you have any thoughts on how the Committee might recommend to strengthen the Act to ensure that that level of consultation, the voices of survivors and those with lived experience are included in the work that is being done, recognising the commissioner does that work? I think the challenge becomes how we’re not just relying on good collaboration or good relationships and ensuring the Act is going to deliver those things, no matter what the state of the departments, the governments or the commissioner in the future. If you have thoughts around that, that would be appreciated.
MARTIJN BOERSMA: Yes, I can offer a brief response and I’d like to take the rest on notice. I think not all collaboration is created equal. A lot of the initiatives that I’ve seen over time that are trying to address labour abuses or labour exploitation range from really diligent, multi-stakeholder initiatives where people come together to try to make a change versus endless talks in hotel rooms somewhere and then lobbies where it’s more of a, “We want to be seen to be perceived to do something rather than actually address it.” But I’m happy to take the rest of that question on notice, if that’s alright?
Ms JENNY LEONG: Thank you, I appreciate it. That would be great.
The CHAIR: It sounds as though that research you did involved multiple stakeholders at all different levels, including people with responsibilities.
MARTIJN BOERSMA: Yes.
The CHAIR: It sounds as though during that there might have been some—well, there must have been some goodwill in the engagement to start with but perhaps some learning for them.
MARTIJN BOERSMA: Yes, there was some goodwill. There was also a bit of force there as well. In the case of the cleaning supply chain, it was the large institutional building owners—whether that’s the super funds or the financial institutions—that were basically afraid of their buildings being cleaned by people who were exploited. Obviously there’s nothing companies fear more than a bad headline. Ultimately they brought their facilities managers and the cleaning contractors on board. There was a lot of goodwill. There was also a bit of stick in addition to carrot there. But that’s one example of industry coming together to try to solve a longstanding issue.
The interesting thing about that is the Australian real estate commercial cleaning supply chain is actually a relatively simple, straightforward supply chain, unlike some of the supply chains that you would see in public procurement. Even there, with a straightforward supply chain, it was already very challenging to put into place. Clearly, ultimately all stakeholders got there, but I suppose it gives an insight into the size of this challenge that we are facing. Again, coming to your point of being early on in that journey or trying to get there, it’s definitely necessary to keep on at it, if you will, because even in that straightforward, merely domestic supply chain the challenge was already significant, let alone if we talk about complex international supply chains.
The CHAIR: I think we might finish with the questions. Dr Boersma, thank you very much for giving he secretariat will contact you because I think there were a couple of items that we’ll follow-up with you. Thank you very much.