Australia mulls Modern Slavery Act

Companies doing business in Australia may soon have to disclose what they’re doing to tackle modern slavery in their operations and supply chain.

Earlier this year, the Australian government launched an inquiry into whether Australia should introduce a modern slavery law, comparable to the U.K. Modern Slavery Act of 2015, to tackle the global problem of modern slavery, including human trafficking, forced labor, and child labor. Hundreds of multinational companies and trade groups have sent submissions in response to the parliamentary inquiry expressing their support, as government efforts continue to progress, although no actual recommendations have been made yet.  

Modern slavery was the key agenda item at a June 22 public hearing of Australia’s Foreign Affairs and Aid Subcommittee of the Parliament’s Joint Standing Committee on Foreign Affairs, Defense and Trade. During that hearing, the Attorney General’s office discussed what current efforts are underway to combat modern slavery in Australia, as well as what improvements must still be made.

Human trafficking, forced labor, slavery, and servitude are all criminalized under Australia’s Criminal Code Act 1995 and include violations occurring outside Australia, provided the offender is Australian. The law establishes corporate criminal liability for violating any of these slavery offenses, but a company may be able to rely on a narrow defense if it can show that it exercised due diligence to prevent the conduct.

“Many of the measures implemented by the U.K. Modern Slavery Act are consistent with the Australian framework,” said Adrian Breen, Assistant Secretary of the Transnational Crime Branch at the Attorney General’s office. The Australian government’s continuing efforts to combat these crimes are further set out in the “National Action Plan to Combat Human Trafficking and Slavery.” 

Since 2004, the Australian Federal Police (AFP) has received more than 750 referrals for human trafficking and slavery-related matters, “and we’ve worked continuously to improve that response since that time,” Breen said. Yet, prosecutions of trafficking and modern slavery offenses in Australia remain low, resulting in just 20 convictions since 2004.

This gap in enforcement is particularly concerning at a time when an estimated 48.5 million people face some form of modern slavery in 167 countries worldwide, according to the 2016 Global Slavery Index. (There are more slaves in the world today than there are citizens of Canada.) Many people are victims of exploitation in private-sector industries—including construction, garment and textile, agriculture, forestry, fishing, manufacturing, and mining. The index estimates that 4,300 people are enslaved in Australia alone.

“Many of the measures implemented by the U.K. Modern Slavery Act are consistent with the Australian framework.”
Adrian Breen, Assistant Secretary, Transnational Crime Branch, Attorney General

In a submission letter to parliament, the Salvation Army’s Freedom Partnership detailed a broad range of modern slavery offenses occurring in Australia, including “slave houses” where workers are held against their will; forced to work excessive hours; unpaid for long periods of time and threatened with deportation if they complain; or held in slave-like conditions and assaulted when they tried to escape.

Exploitation in the supply chain. Modern slavery especially flourishes in global supply chains. To this end, “Addressing exploitation in supply chains is a specific area of focus in Australia’s National Action Plan,” Breen said during last week’s parliamentary hearing.

In November 2014, Australia’s Minister for Justice convened a multi-stakeholder Supply Chains Working Group, consisting of government, business, academia, and civil-society members working together to examine ways to address serious forms of labor exploitation in the supply chains of goods and services.

The working group finalized its work program in December 2015 and reported to the government in early 2016. The government responded to the working group’s report and recommendations at the most recent national roundtable on human trafficking and slavery in November 2016.

“As part of that response, the government announced that it would work with business and civil society to…examine options for an awards program for businesses that take action to address supply chain exploitation; explore the feasibility of a non-regulatory, voluntary code of conduct for high-risk industries; and further consider the feasibility of a model for large businesses in Australia to publicly report on their actions to address supply-chain exploitation,” Breen said.

As part of this response, the Australian government is reviewing the U.K.’s modern slavery reporting requirement, as well as other international best practices, Breen added.

Many large multinational companies are already engaging with their supply chains to ensure ethical business behavior. For example, global food and drink company Nestlé requires all its employees and suppliers to comply with all applicable labor laws through its mandatory Corporate Business Principles, Nestlé Supplier Code, and Responsible Sourcing Guideline.

HUMAN TRAFFICKING AND SLAVERY

Below is a description of Australia’s current legislation on human trafficking and slavery.
Australia's laws criminalising human trafficking and slavery are contained within Divisions 270 and 271 of the Commonwealth Criminal Code Act 1995 (Criminal Code).
Division 270 of the Criminal Code criminalises slavery, the condition of a person over whom any or all of the powers attaching to the right of ownership are exercised. The slavery offences have universal jurisdiction, which means that they apply whether or not the conduct occurred in Australia, and whether or not the victim or the offender are Australian citizens or residents.
Division 270 also criminalises slavery-like practices, including servitude, forced labour, and deceptive recruiting for labour or services. These offences can apply to the exploitation of a person’s labour or services in any industry, or to exploitation within intimate relationships. Forced marriage is also considered a slavery-like practice under Division 270. A forced marriage is where one or both parties to the marriage do not fully and freely consent because of coercion, threat or deception, or because they are incapable of understanding the nature and effect of a marriage ceremony, for reasons including age or mental capacity.
The slavery-like offences in Division 270 have extended geographic jurisdiction, and can apply where the conduct occurred in Australia, or where the conduct occurred outside Australia but the offender was an Australian corporation, citizen or resident. None of the offences in Division 270 require the victim to be moved across or within Australia’s borders. 
Division 271 of the Criminal Code contains specific offences for trafficking in persons, fulfilling Australia’s obligations under the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention Against Transnational Organized Crime. Division 271 includes provisions for trafficking people into, out of, and within Australia, and specific provisions for domestic trafficking, organ trafficking and trafficking in children. Division 271 also includes separate offences for debt bondage and harbouring a victim.
Penalties for the offences in Divisions 270 and 271 range from four years’ imprisonment for debt bondage, to 25 years’ imprisonment for slavery and trafficking in children.
Australian law also provides protections for vulnerable witnesses giving evidence in Commonwealth criminal proceedings, including victims of human trafficking and slavery-related offences. The Commonwealth Crimes Act 1914 (Crimes Act) enables trafficked people to give evidence by closed-circuit television, video-link or video-recording, have their contact with the defendant or members of the public limited, and have a support person with them while they give evidence. The Crimes Act also makes it an offence to publish material identifying a trafficked person, and allows trafficked people to make victim impact statements to the court outlining the harm they have experienced.
Source: Australian government

“We recognize that supply-chain transformation cannot be achieved overnight so, where appropriate, we support suppliers who are not able to meet our Responsible Sourcing Guideline immediately but are committed to eliminating non-compliance over time. Progress against these action plans is monitored and regularly reported, principally in the annual Nestlé in Society Report.

It is also our experience that banning or boycotting suppliers found to have forced labor or child labor in their supply chains does not effectively deal with the root cause of forced labor, and may in some situations exacerbate the plight of rights holders,” Nestlé said. “Rather, it beneficial to our business, our suppliers’ business, and rights’ holders to work to eliminate these practices.”

Disclosure obligations. Introduction of a Modern Slavery Act in Australia would require companies to produce annual reports on steps they are taking to rid slavery in their supply chains. Australia’s Labor party recently issued a policy release, outlining what a modern slavery act should look like. In that policy release, the Labor party proposed that it would “enforce supply chain reporting requirements for all major businesses to ensure no Australian company is either directly, or indirectly, engaged in modern slavery.”

Australian companies would be required to report annually to the government on steps they have taken to ensure that modern slavery is not occurring in their business or supply chain through a slavery and human trafficking statement.

Each statement would be required to include specific information, including:

Information about the company's supply chain;

Where risk has been identified in that supply chain;

What steps are being taken to ensure slavery is not part of the supply chain;

Training provided to staff on these matters; and

Whether slavery has been found in the supply chain and what action has been taken.

The list of companies in Australia required to report under any Australian Modern Slavery Act would be publicly available, and a central repository of statements would be established by the government.  

The Labor party further called for the establishment of an Australian Independent Anti-Slavery Commissioner. “The clandestine nature of modern slavery makes it very difficult for authorities to detect, investigate, and prosecute incidents when they occur,” Labor stated.

Having an Independent Anti-Slavery Commissioner would help remedy gaps that exist in enforcement and in the support services provided for victims “by monitoring and scrutinizing the government’s work to tackle modern slavery,” Labor stated.

Among its roles and responsibilities, the Labor party said, the Commissioner would work with victims of slavery to receive inquiries and complaints; assist companies in building best practices in protecting their supply chains; work with civil society to help prevent and detect slavery in Australia; and lead Labor’s global efforts to fight slavery, including working with other countries and international organizations.

Industry response. Several large multinational companies in Australia have expressed their support for a modern slavery act, reflected in their submissions to the Joint Foreign Affairs Parliamentary Committee Inquiry. However, avoiding duplication in reporting requirements across jurisdictions is a common compliance concern.

Mining company BHP Billiton, for example, commented that “the introduction of a framework for corporate reporting under a Modern Slavery Act in Australia could further enhance transparency in company activities. Increased transparency can be a powerful driver towards improving practice in many fields, particularly where this transparency drives improved performance over time.”

“In this context, BHP would be supportive of a framework that encourages annual public reporting and steps taken during the financial year to ensure that modern slavery is not taking place in Australian listed businesses’ operations and supply chains,” BHP said.

It added that it is “essential,” however, that any new corporate reporting requirements “be closely aligned with the requirements in the U.K. Modern Slavery Act to ensure consistency and avoid the inefficiency of different approaches for companies with global operations across multiple jurisdictions.”

Global sportswear company Adidas Group raised similar concerns in its submission letter. “Whilst Adidas Group is a strong advocate for disclosure, from a business perspective we are concerned that parallel legislative requirements in different parts of the world, including Australia, could create duplication in effort or multiple, varied approaches. This should be avoided.”

“We would recommend that the committee examine how future legislation would complement the U.K. Modern Slavery Act, and, in particular, bring clarity to the specific areas of disclosure required by companies and whether this is best served through Public Statements published on company websites, or through other mechanisms—for example a global register that would act as a common platform for all businesses,” Adidas stated.

Mining company Rio Tinto also commented that, “it is important that companies reporting in different jurisdictions are presented with consistent requirements to drive more effective reporting.” A lack of consistency could create “undue costs” on companies, Rio Tinto added. 

As Australia moves forward with the adoption of a Modern Slavery Act, it will be important for companies that don’t already have internal policies and procedures governing slavery or human trafficking offenses to start to address these issues. Proactive efforts such as conducting a risk-based assessment of the extended supply chain and developing a modern slavery training and awareness program will put the company in a much better position to respond to any new modern slavery legislation that may be adopted in Australia or elsewhere.