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The Modern Slavery Act of Australia

November 11, 2021

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This article is written by Shohom Roy, from Symbiosis Law School, NOIDA. This article analyses the Modern Slavery Act, 2018 enacted by the Commonwealth of Australia.

Table of Contents

Introduction

Slavery is one of the worst practices that have plagued our societies. The notion of slavery had originated as a means of punishment for criminals and subjects of a state defeated in war. This practice had flourished under the European colonizers who imported slaves from poor countries in order to work in their plantations, factories etc. The usage of people as commodities hurts the very idea of a civilization and active global initiatives had been undertaken to eradicate slavery.

In 1981, Mauritania was the last country in the world that abolished slavery. Modern slavery is a disguised form of slavery that commercially exploits the disadvantaged sections of our society. It exists in almost all kinds of places including some of the most developed countries in the world. The Commonwealth of Australia has implemented the Modern Slavery Act, 2018 in line with the global initiatives to eradicate the evil of slavery taken by the United Nation’s International Labour Organization and the Walk Free Foundation. The Act is modelled after the Modern Slavery Act, 2015 which was enacted and implemented in the United Kingdom. The Modern Slavery Act seeks to bind all Australian corporate entities earning more than 100 million Australian Dollars.

Traditional slavery and modern slavery

The slave trade flourished under the Roman Empire and continued even after its decline. The European colonizers operated a Transatlantic slave trade between Europe, America and Africa. A huge number of African men, women and children were sent as slaves to work in European plantations and factories. These slaves were traded for essential products and this slave business continued for more than 400 years before it was abolished around 1807.

The reports of the Global Slavery Index indicate that more than 40 million people are captured in the modern slave trade. There is extremely high gender disparity with more than 71 per cent of the modern slaves being women. Some of the major forms of modern slavery are:

Human trafficking includes the exploitation of people for prostitution, labour, marriage or organs.
Descent-based slavery, in which children of former slaves are passed down like commodities amongst the slave owners, is akin to the traditional form of slavery.
Forced marriage includes marriages in which individuals are married off and held captive against their wishes.
Bonded labour is where people are trapped in an oppressive cycle of borrowing money with an exorbitant amount of interest and then working endlessly for the lender upon failure to repay the debt.
Child slavery includes child soldiers, child marriages, child trafficking and all sorts of commercial exploitation of children.

Differences

Traditional slavery was a legal trade operated by militarily powerful states, whereas modern slavery is a disguised business that is prevalent in almost every section of society. Modern slavery is more widespread in comparison to the traditional slavery existing in the earlier centuries. The advantages of globalization and technological progress have benefited the slave traders due to improved access to vulnerable sections all across the globe with quick, inexpensive modern transportation and low risk.

A major difference between the traditional slavery and modern slavery is profitability and disposability. The modern slave trade industry generates annual revenue of more than $150 billion with the earning from each slave much higher than what it used to be. More than 4 million people are enslaved every day and modern slaves are regarded as disposable due to the sheer amount of human resources available in the slave trade. The exploitation of vulnerabilities of every kind for commercial gain and inexpensive methods of getting rid of slaves has made modern slavery more formidable than traditional slavery.

Similarities

The transportation of traditional slaves mirrors the human trafficking businesses prevalent in today’s world. The mental and physical agony of the slaves is similar in both traditional and modern slavery. The usage of violence, threats and deceptive recruitments methods are common across traditional and modern slavery. Bonded/forced labour remains the most typical form of slavery even today.

Modern slavery in businesses

The world is frequently reminded of the underground modern slavery that exists in the sweatshops of Latin America, the fisheries of Thailand, the cotton industry of China, the agricultural businesses in the Philippines and even the construction of FIFA stadiums in Qatar. The practice of modern slavery has now reached almost every aspect of our society. Modern slavery is different from hazardous working conditions and below minimum wages. The vicious practise of modern slavery usually attracts poor and vulnerable people and then forces them into labour using threats, debts or violence. Almost 24.9 million people are enslaved in the bonded labour market which is associated with some of the most popular international brands. Supply chains are so diverse that businesses are unaware of the practices prevalent in various stages of product procurement. Modern slavery is rampant with slaves working in the cotton industry, mining, garments and transportation.

Provisions under the Commonwealth Act of the country for business entities

The Modern Slavery Act, 2018 (Cth) mandates the submission of an annual Modern Slavery Statement by an entity including Commonwealth companies based in or operating from Australia with a consolidated revenue of more than AUD 100 million AUD 1.1 million.

Reporting period

The reporting entities are required to submit the Modern Slavery Statement within six months from the end of the entity’s fiscal year. Due to the unexpected pandemic caused by the COVID-19, an extension of three months has been permitted.

Reporting entities

The Act specifies that Australian entities and other business entities must have their principal governing body in Australia and a consolidated revenue of more than AUD 100 million in order to fall under ‘reporting entities’. Moreover, the Commonwealth itself falls under the definition of reporting entities and publishes its own annual Modern Slavery Statement. Other Australian entities can voluntarily submit an annual Modern Slavery Statement as per the guidelines mentioned in the Act. When an entity is unaware of its capability to meet the consolidated revenue threshold, the annual Modern Slavery Statement must be prepared beforehand and in case the entity earns more than AUD 100 million, it must submit the statement.

Effects of the Act

The reporting entities must submit the annual Modern Slavery Statement to the Minister of Home Affairs. The statements are kept in an online public repository known as the Modern Slavery Statement Register that can be easily accessed for free. Though there are no penalties for failing to comply with the Act, the Ministry of Home Affairs can request a written explanation within 28 days from the reporting entity. Subsequent non-compliance can lead to the publication of the entity’s identity along with the willful failure to submit the Modern Slavery Statement by the Ministry of Home Affairs. Thus, the Modern Slavery Statements can have a major influence on the key stakeholders, suppliers and potential investors of the business entities.

Importance of business entities reporting to the authorities in mitigating modern slavery

The reporting entities must undertake certain practices before preparing the annual Modern Slavery Report. The foremost step must be to understand and raise awareness about the meaning of ‘modern slavery’. The Modern Slavery Act defines ‘modern slavery’ in accordance with the Commonwealth Criminal Code and international law and encompasses all kinds of activities that are associated with human trafficking, bonded and forced labour, child labour, deceptive recruitment etc.

Procedures and policies

The reporting entities must conduct a risk assessment procedure to identify potential risks of modern slavery in these entities’ operations and supply chains. It must also assess the risk of modern slavery in the organisation’s investment portfolio.

Upon identifying such vulnerable areas the reporting entities must undertake policies and procedures to tackle the issue of modern slavery. Policies can include modifying contracts with existing suppliers, training and educating all individuals associated with the entity about the possibility and implication of modern slavery. The reporting entities can develop a process of response and remedy including an employee grievance redressal mechanism which must be immediately implemented whenever modern slavery is identified. The establishment of an independent body with extensive authority to ensure compliance with human welfare laws can be an essential step towards managing modern slavery risks.

The annual Modern Slavery Statement can therefore prove to be extremely useful to the Australian authorities to meet global commitments of eradicating slavery. It would also protect the business entities from legal, reputational and financial problems of being associated with slavery.

The Modern Slavery Statement

The annual Modern Slavery Statement seeks to distinguish the reporting entity along with its structure, activities and supply chains. The Statement requires the reporting entities to describe any potential risk of modern slavery persisting within any entity owned and controlled by the reporting entity and supply chains associated with it. The reporting entities must disclose the steps taken by it to assess and address potential risks along with due diligence and remediation procedures. The annual Modern Slavery Report should give a fair overview of the entity’s present situation and the impact of its anti-slavery policies in the future.

Though the Modern Slavery Statements should be filed by a single reporting entity, the Act has provisions to allow Joint Modern Slavery Statements by an entity owning and operating multiple business entities within the Australian territory. The Commonwealth’s Modern Slavery Statement published under this Act can initially serve as a guideline for the Australian reporting entities.

Human rights violations in major corporate entities

The principle behind the formulation of human rights law is to keep a check on the immense power of the authorities over the general public. The current territorial framework of tackling human rights abuses fails to hit the mark when dealing with major multinational corporations. These transnational companies have an immense influence on the rights of a huge number of people. The Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct and the United Nations Guiding Principles on Business and Human Rights highlight the importance of due diligence in a business while dealing with the potential negative impacts by their direct operations or through indirect ones like supply chains. However, the bonafide intention behind corporate social responsibility is inadequate in dealing with the prevalent corporate mindset of favouring profit over people. This highlights the role of home countries in ensuring compliance with human welfare laws on an extraterritorial level. The Modern Slavery Act, 2018 takes into consideration the need to regulate entities based in or operating from Australia and combat the modern slavery existing in their supply chains.

The most widespread form of modern slavery is forced labour and more than 50 per cent of the forced labour market exists in the Asia Pacific region. In light of the innumerous reports of human rights violations amongst the Uyghurs living in the Xinjiang region of China, the Australian government has taken an initiative to fight the modern slavery existing in the Chinese regions by ensuring major corporate entities with a huge network of supply chains fall under the ambit of the Modern Slavery Act. This has even raised awareness amongst Australian businesses about the existence of modern slavery in their supply chains. Recently, corporations like Cotton On Group and Target Australia have stopped their supply of cotton from China. Therefore, the Modern Slavery Act can prove to be truly instrumental in tackling the modern slave trade in the Asia Pacific region.

Conclusion

The Modern Slavery Act, 2018 has not been implemented to certify that reporting entities are slavery-free but to ensure that multinational organisations are fully committed to the cause of human welfare and understand the impact of modern slavery in both their operations and supply chains. The Modern Slavery Statements mandated by the Act highlights the clear framework built by the reporting entities and their effectiveness over time. Keeping in line with the Commonwealth legislation the New South Wales Government passed the Modern Slavery Act, 2018 (NSW) with a lower consolidated revenue requirement. The implementation of the NSW Act is under the supervision of the Anti-Slavery Commissioner of New South Wales. The NSW Act penalises non-compliance with fines extending up to AUD $ 1.1 million.

The Commonwealth Act has been unable to create a model of accountability and brings only a small number of major Australian entities under its ambit. However, it is a promising piece of legislation that highlights the efforts of the government in eradicating modern slavery in global supply chains and business entities.

References

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