Australian Government Inquiry into modern slavery – ETI submission

The Australian Government is holding an inquiry into whether Australia should adopt national legislation to combat modern slavery, comparable to the United Kingdom’s Modern Slavery Act 2015.

ETI's new Base Code Guidance: Modern slavery - practical guidance for brands and retailers.

ETI has provided a submission to the Australian Government Inquiry on adopting national legislation to combat modern slavery.

Our submission seeks to answer the Inquiry’s questions on whether a Modern Slavery Act should be introduced in Australia, whether the provisions in the UK’s legislation have proven effective, and if similar or even improved measures should be included in any Australian law. 

We highlighted the role our members and partner organisations played in advocating for the inclusion and strengthening of Section 54 the UK Modern Slavery Act 2015 focusing on Transparency in Supply Chains.

We also emphasised the need to engage with a diverse set of stakeholders during consultations. This is to ensure that all stakeholders with a vested interest in eradicating modern slavery have a voice at the table and that their expertise properly informs the shape and content of any legislation.

CEO attitudes firm up

Key findings from a joint research study, Corporate Leadership on Modern Slavery, conducted by ETI and Hult International Business School, were also referenced.

The complexity of supply chains, as well as the often hidden nature of modern slavery, makes slavery difficult to identify and address.

However, the research, which investigated corporate attitudes and responses to modern slavery, indicated that CEO and senior executive engagement on issues around modern slavery doubled in the year after the Act was passed.

Interestingly, 77% of companies felt that there is a likelihood of modern slavery occurring at some stage in their supply chains – particularly in high-risk countries or sectors and at the lower stages of the chain.

The ETI/Hult International research also found that companies are making significant progress in addressing modern slavery and that responsibility for conducting ethical trade within companies escalated in the year after the Act was passed.

Consequently, we have strongly encouraged the Australian Government to introduce legislation requiring corporate human rights due diligence and disclosure.

Regulation relating to the conduct of businesses with regards to human rights due diligence requiring mitigation of risks around labour rights abuses and exploitation would contribute significantly to international efforts to promote human rights in business supply chains.

It would also help bring companies into line with their commitments set out in the UN Guiding Principles on Business and Human Rights.

Our specific recommendations

ETI takes the view that improved regulation and transparency around modern slavery is helping to create a level playing field and is slowly rooting out businesses that derive competitive advantage from modern slavery.

Without a level playing field, there is a risk that responsible businesses that have helped to drive this agenda may become less engaged if they feel their concerns are not being addressed. 

In addition to the research findings, we also identified improved measures that could be introduced in Australia and that would likely strengthen the application of an equivalent Act, particularly around effective enforcement and incentivization. Recommendations included:

• Creating a comprehensive list of companies required to report under an Australian Act that is published and maintained.
• Creating a repository to publicly map which companies have published statements.
• Including a provision requiring companies bidding for public sector contracts, or seeking export credit guarantees, to publish a compliant modern slavery statement as a means to incentivise better performance from businesses on modern slavery.
• Including provisions that would enable victims of modern slavery to access civil and criminal remedy in Australia.

Being in line with global action

The first clause of the ETI Base Code requires that employment is freely chosen. Yet while slavery is almost universally outlawed, modern slavery is still widespread.

The International Labour Organization (ILO) estimates that at least 21 million men, women and children around the world are in some form of slavery and that forced labour in the private economy generates US$150 billion in illegal profits per year.

Furthermore, the global legislative direction is clear. This consultation is part of a wider trend whereby governments are increasingly moving away from producing voluntary guidelines and are instead requiring mandatory due diligence and disclosure in order to tackle issues such as forced labour.

Yet we recognise that while the Modern Slavery Act has prompted action on addressing specific risks, legislation alone (as crucial as it is) will not bring about the significant reductions in modern slavery that are needed. 

We therefore also support the ILO's Alliance 8.7. Launched in September 2016, this multi-stakeholder initiative seeks to end forced labour, modern slavery, human trafficking and child labour by 2030 and has been named after target 8.7 of the world’s Sustainable Development Goals (SDGs).

As part of its remit, Alliance 8.7 will coordinate with many interrelated SDGs and requires strong backing.

Impact on wider issues and standards

It is important to note that the issue of modern slavery has been a vital entry point for wider discussions around business and human rights and about labour standards more generally.

So we do not only focus on slavery and the very worst forms of corporate abuses.

Slavery lies at the extreme end of a spectrum of abuse, exploitation and discrimination against workers. But the incidence of modern slavery is also directly related to wages, working hours, health and safety, freedom of association and collective bargaining rights and other core labour standards.

That’s why ETI is working to promote human rights due diligence approaches that will enable companies to identify and mitigate risks to workers and other stakeholders in line with the UNGPs.

It’s also why the Inquiry is just a first step in what we hope will be the longer journey of fostering greater business respect for human rights. And in eradicating modern slavery from all supply chains linked to Australian businesses.  

Read ETI’s submission here. All submissions received by the Inquiry are logged here. Go to ETI’s web page on Modern Slavery for more information and resources. For information on Human Rights Due Diligence, see ETI’s new Framework which serves as a guide for companies to help manage and mitigate labour rights risks and understand why engagement, negotiation and collaboration are the best way to succeed.