A new law in Australia requires companies of a certain size operating in Australia to publicly state the steps they are taking to keep their supply chains free from the worst forms of modern-day slavery. The law, which went into effect on January 1st, is aimed at ending child and forced labor as well as human trafficking.
Companies will have to file annual statements on their modern slavery efforts according to a set of mandatory criteria, including a description of the company’s operations and supply chain, any risks for modern slavery in the supply chain, and a description of the steps the company is taking to address those risks. The first of these statements is likely to be due by mid-2020.
A government-run database, accessible to the public and free of charge, will house these statements. One glaring gap is that the Australian law currently does not penalize companies for noncompliance, though the Minister for Home Affairs can make an inquiry if a company has not complied. If a company fails to respond, the minister may publicly disclose information about the company’s failure to comply.
Subnational governments in other countries have also adopted similar laws, such as the California Transparency in Supply Chains Act. Additionally, last June the Australian state of New South Wales passed its own modern slavery law, making critical additions to the national law by creating an independent anti-slavery commissioner to monitor implementation and promote action against modern slavery. The law also creates a range of monetary penalties for companies with employees in New South Wales that fail to comply with the modern slavery statement requirements.
Australia’s modern slavery law is an important initial step to ensuring that company supply chains are free from modern day slavery and trafficking, but the national or state governments can go further to ensure compliance. Future legislative efforts, whether in Australia or in other countries, should include systems for monitoring as well as consequences for non-compliance – innovative and pioneering elements found in the New South Wales law.