In mid-August Australia’s justice minister proposed a new law requiring the country’s biggest companies to report on their practices and policies to prevent forced labour in their operations and supply chains. The government wants to ensure that consumer products like food, electronics, and clothing – whether they’re made abroad or domestically – are not produced by people forced to work against their will. It is a laudable goal, but the steps they’ve taken are inadequate.
The proposed law builds on the Australian government’s existing commitments to combat modern forms of slavery, and takes the added step of requiring large companies operating in Australia to report annually on their operations and supply chains; on the risks for forced labour and other conditions seen as amounting to slavery to appear or exist within those supply chains; and on whether the company has policies and practices in place to eliminate these conditions. Notably, it also requests information on due diligence – the processes that companies use to identify, monitor, and address ‘slavery-like’ practices or the risk of these occurring.
Mandatory reporting on these subjects is an important first step in promoting transparency and fostering accountability. In Australia, it is being pursued in light of a consultation paper recently released by the justice ministry, which concluded government regulation is a necessary part of combatting the “grave abuses of human rights and serious criminal misconduct” associated with conditions of ‘modern slavery’.
However, the government’s proposal doesn’t require companies to take the essential steps to eliminate these conditions, such as mandating due diligence to identify and prevent them. Even though reporting is required, there are no penalties for companies that refuse. Without meaningful due diligence requirements or penalties for noncompliance, the law is little more than a suggestion for voluntary action. This flies in the face of the government’s claim that regulation is needed to tackle situations that amount to slavery.
The UK has a similar approach, and nongovernmental organisations monitoring its law have found that only 14% of companies that submitted reports complied with the basic reporting requirements.
Other countries have gone further to address these gaps. For example, a French law passed earlier this year requires companies to conduct due diligence in their supply chains, and also allows people to bring a claim in court if a company is not following through with the law. Australia’s law should similarly require companies to identify and address forced labour and other conditions amounting to slavery in their supply chains. When companies choose not to follow these rules at the expense of workers in their supply chain, the government needs to ensure that victims around the world have a clear path to remedy and justice, including access to Australian courts.
Australia’s proposal has other limitations that will prevent it from being effective. The government wants the law to apply only to the largest companies – those with annual revenues of AU$100 million or more – instead of looking at industries or companies where these problems are most prevalent, regardless of size. This makes this law even weaker than the UK’s, which requires reporting from companies with turnovers of more than £36 million (approximately AU$59 million).
The government doesn’t plan to apply these standards to its own purchasing, and so will not insist on sourcing goods from companies that comply with Australia’s anti-slavery laws. This is a major lost opportunity for the Australian government to set an example on ethical sourcing and use its own buying power to compel companies to act responsibly.
The government needs to lower the revenue limits of companies subject to the law and include all industries in which forced labour issues are known to exist, while stating that it will only procure goods from compliant companies.
The final version of the law must still be hammered out by the Australian government. Officials will consult with businesses, nongovernmental groups, and the public to produce a final proposal. The government will most likely hear conflicting perspectives in this process, but the goals should be clear: effectively combatting any practices that amount to slavery and ensuring responsible supply chains. While transparency is a critical first step, regulation can only be effective in achieving these goals through concrete requirements, broad application, and effective enforcement strategies.