Australia's Modern Slavery Act 2018 (“the Act”) has created a new way of thinking about modern slavery. It also highlights that if large entities look for modern slavery in their supply chains and take action to remove it, the problem could possibly be reduced.
Modern slavery is an umbrella term that encompasses a set of specific legal concepts that include forced labour, debt bondage, forced marriage, slavery, and slavery-like practices. Essentially it refers to situations of exploitation where a person cannot refuse or is unable to leave a situation because of threats, violence, coercion, deception, and/or abuse of power.
Every country in the world is affected by this hidden crime. Although found in many industries such as garment manufacturing, mining, and agriculture, modern slavery is not restricted to just industry. It can be found anywhere, from private homes and businesses[1] to settlements for displaced people and refugees.
But how do you know if the problem exists in your own company? An important starting point is the Walk Free Foundation’s Global Slavery Index (‘the Index’). By compiling data about the prevalence and geographic variation of slavery, the Index gives a detailed, thoroughly researched picture of modern slavery as it exists across industries and countries today. As well as highlighting the risks that populations around the world face, it indicates the actions governments are taking to combat modern slavery.
Globally, modern slavery affects over 40.3 million people, with the Index indicating that approximately 15,000 people in Australia have fallen victim. Although more likely to be present in overseas supply chains, modern slavery is also present in parts of Australian supply chains. Further, with COVID-19 causing widespread unemployment, increased isolation and the scrutiny of labour practices reduced it is becoming more likely that vulnerable people will be exposed to exploitation.
In 2012, Fortescue Metals Group (‘Fortescue’) took a proactive approach to investigate their supply chain. They asked their suppliers to review supply chain processes to ensure that labour practices were in line with international minimum standards. Some of their suppliers had trouble with this. Upon further investigation of the working conditions of one of the suppliers, along with interviews of over 100 of their workers, telling signs of modern slavery were discovered. Fortescue’s leverage, as a customer, was swift. Restorative action including back-pay, the return of passports and major overhauls of processes to make sure this did not happen again was immediate.
“Modern slavery has been a key focus for Fortescue for a number of years and significantly it was the strong advocacy from business, most notably from our Chairman and Founder Andrew Forrest AO, that led to the introduction of Australia’s Modern Slavery Act.”
Ahead of the 31 December 2020 deadline, Woolworths has released their Modern Slavery Statement, which identified 332 Australian fruit and vegetable suppliers within its supply chain where workers are at risk. A Woolworths spokesperson said that transparency was the "core" of its approach and "we know there is more to do, and remain focused on working closely with our suppliers, regulators, industry bodies and unions to drive further improvement in this space".
The Act applies to entities based or operating in Australia with annual consolidated revenue of at least A$100 million. It includes entities based or operating in Australia; Commonwealth and Corporate Commonwealth entities and extends to joint reporting by groups of entities. Entities that do not meet the financial threshold may voluntarily report, however they must give notice before the end of the reporting period and can revoke their notice before the start of the reporting period. The Australian Government houses the modern slavery statements on their Online Register for Modern Slavery Statements.
Insurers have the same obligations to report in relation to mandatory criteria and smaller insurers who are under that revenue level can, and should, voluntarily report under the legislation. In leading by example, insurers can play an important role to help shift insured customers and the marketplace in the right direction on modern slavery.
Lawyers can also get involved in addressing and minimising human rights abuses by ensuring the Act is enforced effectively. They can engage by:
Reading Modern Slavery Statements. The Act states that these statements “must set out the reporting entity’s actions to assess and address modern slavery risks in their global operations and supply chains”. These statements are published through an online central register by the Australian Government.
Critically analysing the effectiveness of corporate responses to ensure that reporting entities are actively engaging with the issue of modern slavery and that they are improving year-on-year.
Taking action by becoming an ethical consumer. This can take the form of greater awareness of at-risk products, taking note of corporate responses to allegations of modern slavery, contacting organisations about their responses and getting involved with NGOs and community groups that are actively involved in this area.
Advocacy from companies like Fortescue Metals Group has gone a long way in raising the profile of modern slavery, with the main driver for change being transparency and accountability.
Education – and educating – is another way to advocate for change. Free a Girl took a unique approach to modern slavery in India and Nepal when they opened their first School for Justice in 2017. Survivors of child prostitution and trafficking are trained to become lawyers with the power to prosecute the criminals that exploited them.
Both a school and an education programme, the School for Justice provides the support, tuition and mentoring the girls need to reach university level. The next 5 years are spent studying to achieve their Bachelor of Laws so they can lobby the government to become public prosecutors in order to try and challenge India's legal system from within. The School of Justice is a master stroke to bring forward lasting change.
In contract negotiations with suppliers, companies can try and include the right to conduct spot checks on factories or facilities without notice, an area they can then report on as an action that they’re taking to address the risks of modern slavery statement.
Items that companies can address in their statement include:
What is your connection with that risk?
Are you causing it?
Are you contributing to it with increased demands which causes a supplier to engage additional workers working unreasonable hours?
By stocking your shelves with items produced by forced labour, are you directly linked to modern slavery?
What actions are you taking to address the risk?
Using risk assessment tools along with due diligence, categorising suppliers into low, medium and high risk, can lead to informed decisions regarding engagement of a supplier. Building meaningful relationships with suppliers and recognising the leverage that companies and their suppliers have to influence change will make an impact.
Legislation provides the framework and support for businesses and government to try and drive modern slavery from supply chains, but everyone has a role to play in the eradication of exploitation and slave labour.
Footnote
Farok Shaik (2020), Anti-Slavery Australia, 1 July 2020.
Questions? Contact Mark Da Silva, Principal Lawyer