Modern Slavery: What Is It and How to Meet the Modern Slavery Act Requirements

1. What is Modern Slavery in Australia?

Governments worldwide are taking action to ensure organisations are actively working towards the eradication of forced labour and human trafficking from their supply chains and operations.

Systemic change will address these challenges and various models are being implemented globally to upgrade laws around Modern Slavery.

In the UK, the Modern Slavery Act 2015 was the first of its kind to be developed. Since then, other countries have followed suit.

In France, the Corporate Duty of Vigilance Law enacted in 2017 requires French companies with more than 5,000 employees to develop a public vigilance plan.

The United States has The Uyghur Forced Labour Prevention Act of 2021 in place, along with the Transparency in Supply Chains Act 2010 in California. The Supply Chain Due Diligence Act was enacted in 2021 in Germany and became operational in 2023.

In April 2022 the New Zealand Government released a draft legislative proposal and The Transparency Act was enacted in Norway in July 2022.

In mid 2022 the Canadian Parliament was considering a modern slavery law, called the Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211).

Australia is also moving towards better legislation, with modern slavery a serious and growing problem. Many vulnerable individuals and groups are exploited for labour and other forms of servitude. One of the key forms of modern slavery in Australia is forced labour, which can include individuals being forced to work long hours for little or no pay, or being subjected to dangerous working conditions. This can occur in a wide range of industries, including agriculture, construction, and hospitality. Other forms of modern slavery in Australia include debt bondage, human trafficking, and forced marriage.

The Australian government has taken steps to address this issue through the Modern Slavery Act 2018. The Act requires certain companies and organisations to report on their efforts to prevent and address slavery and human trafficking in their operations and supply chains. The reporting requirements of the act apply to entities operating within Australia, with an annual consolidated revenue of more than AUD$100 million for the Federal act and AUD $50 million in the New South Wales Act.

A key issue is that the reporting requirements under the Act are not robust enough to effectively identify and address the problem of modern slavery. There is no standardisation of the statements, which makes it difficult to compare and evaluate the efforts of different companies and organisations.

Additionally, the Act does not specify what measures and actions are required to prevent or address modern slavery, so it is difficult to know if the companies and organisations are actually taking meaningful steps to combat this issue.

This raises another issue – reporting requirements of the Act are voluntary, with no penalty enforced for non-compliance. This gives some companies and organisations leeway to not take the reporting requirements seriously, or not fully disclose information about their efforts to prevent and address slavery and human trafficking if they so choose. Moreover, the Act does not provide for any independent oversight or enforcement of the reporting requirements.

These key challenges mean there is no way to ensure effective steps are being taken to prevent and address modern slavery or to hold companies and organisations accountable for any failures to do so. In light of these concerns, some experts have called for stronger and more comprehensive legislation to address modern slavery in Australia. This could include mandatory reporting requirements, independent oversight and enforcement of the Act, and penalties for non-compliance.

While the Modern Slavery Act 2018 is a step in the right direction in addressing the issue of modern slavery in Australia, there are concerns about its implementation and effectiveness. However, it’s important to note that it is still relatively new legislation and it will take some time to fully evaluate its effectiveness and make any necessary adjustments. Further information can be found in the Australian Government’s Review of the Modern Slavery Act.

Two full reporting cycles have concluded, on 30 June 2021 and 30 June 2022 respectively. The indicative number of statements published from reporting entities were:

• First reporting cycle – over 1,720 statements
• Second reporting cycle – over 3,420 statements

Compliance assessment of modern slavery statements submitted in the first and second reporting cycles (as at 30 June 2022) indicate an improvement to compliance with the reporting requirement under the Act, however it is estimated that the vast majority of organisations who have submitted a compliant Modern Slavery Statement in Australia are still yet to take meaningful action in favour of a risk-shifting approach to addressing Modern Slavery within their supply chains.

The Australian Government has foreshadowed (in a 2022 Election commitment) that it would consult with business and advocacy groups to amend the Act to introduce penalties for noncompliance.

The Australian Government has a six year program comprising four phases –

1. Foundation
2. Discovery
3. Implementation, and
4. Review.

The first two Commonweatlh Statements fall within the Foundation and Discovery phases, which involve establishing a practical basis for NCCE reporting; awareness raising and training; and commencing targeted supply chain mapping and risk assessments.

Further Commonwealth Statements are expected to conclude the Discovery phase and progress to the Implementation and Review phases, which will include mitigation strategies and targeted action; and review of overall effectiveness and forward planning.

3. What Organisations Need to do to Meet the Modern Slavery Act Requirements in Australia

To meet the requirements of the Modern Slavery Act in Australia, organisations must:

1. Publish an annual modern slavery statement on their website, outlining their actions to address modern slavery within their operations and supply chain.
2. Establish a modern slavery reporting mechanism for employees, suppliers, and other stakeholders to report instances of modern slavery within the organisation.
3. Develop and implement policies and procedures to identify and prevent modern slavery within the organisation and its supply chain.
4. Conduct regular risk assessments and audits to identify and address potential instances of modern slavery.
5. Provide training to employees on modern slavery and how to identify and report instances of it within the organisation.
6. Collaborate with other organisations, government agencies, and civil society groups to share best practices and address modern slavery.
7. Regularly review and update policies and procedures to ensure they are effective in preventing and addressing modern slavery.

Overall, meeting the requirements of the Modern Slavery Act 2018 is an ongoing process. It requires companies and organisations to be proactive and vigilant in identifying and addressing any potential risks of slavery or human trafficking in their operations and supply chains.

By taking a comprehensive approach to preventing and addressing modern slavery, companies and organisations can play a critical role in protecting vulnerable individuals and groups and in promoting greater social and economic justice in Australia.

It’s important to note this is a serious issue that should be taken seriously and not just treated as a compliance exercise. Companies and organisations should be transparent and accountable in their reporting and efforts to prevent and address modern slavery.