The urgency to eradicate modern slavery has been exemplified by the federal government with the 2023 Modern Slavery Act Review.
The review is the first step towards strengthening Australia’s modern slavery laws, set out in the Australian Modern Slavery Act 2018 (Cth). The act requires large businesses and other entities in Australia to submit an annual report to the Australian Government on how they are addressing modern slavery risks in their operations and supply chains.
Industries where modern slavery is most likely to occur include anything marked by low-value, labour-intensive activities (e.g. agriculture, manufacturing, hospitality, and domestic work). It’s not just criminal ventures that we commonly associate with unscrupulous dealings, but modern slavery has also been seen in other sectors, such as car wash businesses and call centres.
The recent review of the Modern Slavery Act was published with recommendations for lowering the reporting threshold from $100 million to $50 million, introducing penalties for non-compliance, and establishing a Federal Anti-Slavery Commissioner.
The argument put forward in supporting these recommendations is that greater transparency will lead to improved performance and greater scrutiny of company actions by different stakeholders.
Within procurement, modern slavery statements are increasingly checked during procurement processes. Investors have a keen eye on assessing the quality of modern slavery reporting by investment targets.
The review notes, “There is a strong belief that business – overall – is taking the Act and the reporting requirement seriously. Numerous changes and innovations point to this happening – executive-level training, appointment of specialist staff, auditing and supply chain mapping, interrogation of suppliers, creation of professional networks, revision of contract arrangements, and greater multi-stakeholder collaboration, including civil society.”
However, further progress is to be made. The recommendations made by the review include:
- Introducing penalties for non-compliance with statutory reporting requirements (to date, there remain no penalties for non-compliance)
- Lowering the reporting threshold for all businesses and entities operating in Australia with consolidated revenues greater than $100M to $50M
- Amending the Act to require entities to have a due diligence system in place
- Strengthening the administration of the Act through proposed legislative amendments and expanded administrative guidance and
- Proposing functions for the federal Anti-Slavery Commissioner in relation to the Act.
Allowing recommendations to turn into more requirements can come with its questions, Dr Katherine Christ, an expert in accounting for modern slavery risk in business operations and supply chains and Founder of the South Australian Modern Slavery Research and Practitioner Network, said, “Businesses are scared. Even those who wish to do a good job and avoid any implications in slavery-related scandals are concerned. A key question often asked is: but what if we find something?”
And find something they just might. So far, the outcomes of the Act have found occasional scattered instances of modern slavery incidents and victims being identified.
Critically, the review tells us, “[there is] no strong storyline that the drivers of modern slavery are being turned around. Independent studies and government evaluation have found a high level of apparent noncompliance, sometimes with basic requirements and at other times with best practice expectations.”
Without rigorous governance across the procurement process, businesses may be perpetuating modern slavery. Procurement Australia stands by the Act and subsequent iterations; we aspire towards a world with slave-free trade, and our rigorous procurement process, in line with government requirements, ensures our members have confidence in the process and they are doing the right thing.
