Australian businesses must join to eradicate modern slavery

DR JACOBA BRASCH QC, PRESIDENT, LAW COUNCIL OF AUSTRALIA

“It is a confronting reality that even in the present day, men, women and children all over the world remain victims of modern slavery. They are bought and sold in public markets, forced to marry against their will and provide labour under the guise of “marriage,” forced to work inside clandestine factories on the promise of a salary that is often withheld, or on fishing boats where men and boys toil under threats of violence. They are forced to work on construction sites, in stores, on farms, or in homes as maids. Labour extracted through force, coercion, or threats produces some of the food we eat, the clothes we wear, and the footballs we kick. The minerals that men, women, and children have been made to extract from mines find their way into cosmetics, electronics, and cars, among many other products.”1

According to experts, there are more people enslaved today than at any other time in history - roughly 13 million people were captured and sold as slaves between the 15th and 19th centuries,2 whereas the most recent, reliable data available estimates that 40.3 million people3 are living in some form of modern slavery, 70% of whom are women and girls.4

For Australia, the Walk Free experts estimate 15,000 people are living in modern slavery,5 but alarmingly add a rider that the prevalence estimates for various countries, including ours, are likely higher than previously understood.6 However, many Australian businesses are unaware of the risk of slavery in their business or supply chain – for example, in 2019, Australian retailers Target and Cotton On ceased sourcing cotton from China’s Xinjiang province, following an expose by ABC’s Four Corners.7

Walk Free also note: even in countries with seemingly strong laws and systems, there are critical gaps in protections for groups such as irregular migrants, the homeless, workers in the shadow or gig economy, and certain minorities. These gaps, which are being

actively exploited by criminals, need urgent attention from governments.8

Thus, in 2018, the Commonwealth enacted the Modern Slavery Act 2018 (Cth), which came into force on 1 January, 2019. It established mandatory Reporting Requirements for businesses with a revenue of $100M and above.9 Those under that threshold can voluntarily report.10

In turn, the Law Council of Australia, guided by its Business and Human Rights Committee, has collaborated with the Association of Corporate Counsel and released a fact sheet to help businesses understand their reporting requirements under the Modern Slavery Act 2018 (Cth). It is available on the Law Council website.11

There is no doubt that taking action to combat modern slavery makes good business sense. Businesses that take action to combat modern slavery in their operations and supply chains are protecting themselves against possible business harm while improving the integrity and quality of their supply chains.12 They can also increase profitability, investor confidence and access to financing opportunities.13

Whether a mandatory or voluntary reporter, a ‘modern slavery statement’ is submitted to the Minister, via a publicly accessible registry on the Australian Border Force’s website.14 The modern slavery statement must: • identify the reporting entity; • describe the structure, operations and supply chains of the reporting entity; • describe the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls; • describe the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks, including due diligence and remediation processes; • describe how the reporting entity assesses the effectiveness of such actions; and • describe the process of consultation with any entities the reporting entity owns or controls, and any entity with which it is issuing a joint modern slavery statement; and • include any other information that the entity giving the statement considers relevant.15

The statement must be given to the Minister within six months after the end of the reporting entity’s reporting period (usually its financial year), in a manner approved by the Minister.16

However, the drafting of such a statement should not be the starting point of working to eradicate modern slavery. Instead, all businesses should be continually assessing and addressing any modern slavery risks.17 This includes the implementation or enhancement of sound governance and policy frameworks which should be cross functional and include, legal, procurement, compliance and risk, with all business units involved in the process.18

Also critical for any business is building awareness of what modern slavery is in practice and how it may be relevant to a particular business or organisation. Yet it is not just the principal organisation that has to consider this, but also those who procure finished goods, use contractors, hold events, provide food and supplies, or invest in the business.19 They must all examine their activities and supply chains to evaluate risk. Further, entities within the corporate group, and external organisations such as suppliers, unions, contractors, and other stakeholders also should be consulted.20

A risk assessment and response process, along with due diligence on modern slavery risks, would include mapping key parts of the organisation’s operations and supply chain, as well as the organisation’s investment portfolio. There may be a need to amend contract

terms and codes of conduct with business partners and suppliers. Expectations should be clearly communicated, and processes established to monitor the effectiveness of the steps taken to ensure that modern slavery is not occurring in the business or supply chains. There may also be a need to collate or audit current policies to identify gaps and formulate new policies as needed, such as a human rights policy.21

Entities need to develop processes to enable remediation if they identify that they have caused or contributed to modern slavery. This may take the form of a grievance mechanism through which people can raise concerns about the impact an entity is having on them.22 It is important that grievance mechanisms are accessible through multiple reporting channels (email, phone etc) that account for cultural/linguistic barriers, and that the contact person is trained in identifying modern slavery.23

The impact of COVID-19 on victims of modern slavery has been dire,24 with modern slavery victims in danger of infection through unsafe accommodation, at the mercy of ‘employers’ who no longer need their labour because of supply chain disruption, or in the case of domestic workers made invisible to the outside world through lockdowns and isolation. The Australian Government has stated that ‘now more than ever, it is vital that entities continue to take action to combat modern slavery risks in their global operations and supply chains and report on these actions through their modern slavery statements.’25 While COVID-19 has increased the risks of modern slavery occurring globally, it has also created additional challenges for reporting as businesses move quickly to find new supply chains.

For businesses that have been impacted by COVID-19 and need to (or opt to) report under the Act, the Australian Border Force has developed a Guidance Tool.26 This tool outlines key actions entities can take to reduce the risk of vulnerable workers in their operations and supply chains becoming exposed to modern slavery because of COVID19.

The Law Council, led by its Business and Human Rights Committee, continues to work closely with the government in support the implementation of the Act as a member of the Australian Government’s Modern Slavery Expert Advisory Group, as well as a participant in the National Roundtable on Human Trafficking and Modern Slavery convened by the Australian Government. This includes engaging on how businesses can best respond to their broader distinct responsibilities to respect human rights, as set out in the United Nations Guiding Principles on Business and Human Rights 2011.27

While many Australian companies may be unaware that modern slavery practices are occurring in their supply chains or businesses, whether in Australia or elsewhere in the world, ignorance is no longer an excuse. Instead, by managing and reporting on the risks of modern slavery in their operations and supply chains, reporting entities based, or operating in Australia, are now joining the international effort to eliminate modern slavery, while also protecting themselves from serious legal, reputational, operational and financial risks of being connected with modern slavery.28 B

Endnotes 1 https://www.globalslaveryindex.org/2018/ findings/global-findings/. 2 See https://www.slavevoyages.org/assessment/ estimates as cited by https://www.theguardian. com/news/2019/feb/25/modern-slaverytrafficking-persons-one-in-200. 3 As at 2016. https://www.globalslaveryindex. org/2018/findings/global-findings/ (2018). 4 https://www.globalslaveryindex.org/2018/ findings/global-findings/. 5 https://www.globalslaveryindex.org/2018/data/ country-data/australia/. 6 https://www.globalslaveryindex.org/2018/

findings/executive-summary/. 7 https://theconversation.com/four-cornersforced-labour-expose-shows-why-you-might-bewearing-slave-made-clothes-115462. 8 https://www.globalslaveryindex.org/2018/ findings/executive-summary/. 9 Modern Slavery Act 2018 (Cth) s 5. 10 Modern Slavery Act 2018 (Cth) s 6. 11 https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20

Factsheet%20Final%20-%20July%202020.pdf. 12 https://www.homeaffairs.gov.au/criminaljustice/Pages/modern-slavery.aspx. 13 Ibid. 14 https://modernslaveryregister.gov.au. 15 Modern Slavery Act 2018 (Cth) s 16. 16 Modern Slavery Act 2018 (Cth) ss 13(2)(e) and 14(f)(i). 17 See Commonwealth Modern Slavery Act

‘Guidance for Reporting Entities’ (2018) 26. 18 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20

Factsheet%20Final%20-%20July%202020.pdf. 19 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20

Factsheet%20Final%20-%20July%202020.pdf. 20 Ibid. 21 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20

Factsheet%20Final%20-%20July%202020.pdf. 22 See Commonwealth Modern Slavery Act

‘Guidance for Reporting Entities’ (2018) 47-48. 23 Ibid. 24 https://www.sydney.edu.au/content/dam/ corporate/documents/faculty-of-science/ research/physics/covid-and-mordernslavery.pdf. See also https://www.ohchr. org/EN/NewsEvents/Pages/DisplayNews. aspx?NewsID=26246&LangID=E. 25 https://minister.homeaffairs.gov.au/jasonwood/

Pages/government-extends-reporting-deadlines. aspx. 26 https://www.homeaffairs.gov.au/about-us/ our-portfolios/criminal-justice/peoplesmuggling-human-trafficking/modern-slaveryact-coronavirus. 27 https://www.ohchr.org/documents/ publications/guidingprinciplesbusinesshr_en.pdf. 28 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20

Factsheet%20Final%20-%20July%202020.pdf.