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Will the Modern Slavery Act be effective in disrupting slave labour?

By Andrea Tokaji - posted Thursday, 30 April 2020


Historically, Wilberforce's Slavery Abolition Act was passed by the House of Commons on 26th July 1833 and its aim was to dismantle the large-scale plantation slavery that existed in Britain's tropical colonies, where the enslaved population was usually larger than that of the white colonies.

Fast forward to 2000, the United Nations Convention against Transnational Organised Crime was adopted by General Assembly resolution 55/25 on the 15th November. This Convention is the main international instrument in the fight against organised crime, signifying the recognition by Member States of the seriousness of these international problems, as well as the need to foster and enhance close international cooperation in order to tackle them.

The Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children adopted by General Assembly resolution 55/25, entering into force on 25 December 2003 sits within the aforementioned Convention. It is the first global legally binding instrument with an agreed definition on trafficking in persons and its intention is to facilitate convergence, in recognition of their dignity as persons.

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This International Protocol is necessary: the 2018 Global Slavery Index estimates that 45.8m people in 167 countries are living in modern slavery today, including 24.9 million in forced labour and 15.4 million in forced marriage. This means that there are 5.4 victims of modern slavery for every 1,000 people in the world.One in four victims of modern slavery are children.

Out of the 24.9 million people trapped in forced labour, 16 million people are exploited in the private sector such as domestic work, construction or agriculture; 4.8 million persons in forced sexual exploitation, and 4 million persons in forced labour imposed by state authorities. Women and girls are disproportionately affected by forced labour, accounting for 99% of victims in the commercial sex industry, and 58% in other sectors.

Human trafficking and slavery in the form of forced labour perpetuates not only grave human rights violations against the most vulnerable, but it often perpetuates poverty, generational debt and compromises corporate transactions due to its criminal, fraudulent nature - neglecting the basic principles of human rights, the dignity of the person and a fair wage for all..

In 2016, there were an estimated 11,700 victims of the legally defined forms of slavery in Britain alone, and since 2015, there has been a concentrated focus on slavery in the labour force and in commercial supply chains through international standards set such as the UN's Guiding Principles on Business and Human Rights and a series of domestic legislation implemented in several States to flush out the practice pf purchasing goods made by slaves.

The majority of trafficked slaves globally are victims of exploitation in private sector activities, such as manufacturing, construction agriculture, or within the hospitality or tourism industries. Forced labour and slavery is big business - the International Labour Organisation estimates that illicit profits from these crimes amounts to US$150 billion per year.

There is no doubt, in today's economy: modern slavery represents a significant reputational risk to businesses as non-governmental organisations and the media 'name and shame' companies who violate human rights, with businesses facing increasing pressure to tackle the crisis of modern slavery head-on as awareness grows and consumers demand higher ethical standards from their preferred brands.

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Domestic Laws that address Slavery in Business Supply Chains

The UN Guiding Principles Reporting Framework 2015, developed out of the UN Guiding Principles on Business and Human Rights was the world's first comprehensive guidance for companies to report on how they respect human rights, with the author of the Guiding Principles, Professor John Ruggie, calling the Reporting Framework an "indispensable tool".

In 2015, the UK Parliament introduced their Modern Slavery Act 2015, which, among other measures, requires commercial organisations in any sector with a global annual turnover of £36m or more who do business in the UK to disclose in an annual Slavery and Human Trafficking Statement the steps they are taking to address modern slavery in their business and supply chain in provision 54 of the Act.

A 'transparency in supply chains' clause in the UK Act has been praised as the first of its kind, and seen as an improvement on the Californian Transparency in Supply Chains Act (2010) – legislation on which it was partly premised. The Californian law only applies to the retail and manufacturing industries, with the UK law going beyond targeting manufacturing companies to commercial organisations across all sectors with a lower turnover threshold for compliance and therefore capturing more companies under its reporting requirement.

As I got up to speak on Australia's proposed Modern Slavery Bill in December 2018 at the 9th International Human Rights Education Conference in Sydney, Federal Parliament debated the same Bill, passing it the following week. Australia's Modern Slavery Act 2018 came into effect on the 1 January 2019. As predicted, the new law focuses on a similar transparency in supply chains standards in line with the UK law - with some divergence.

As a lobbyist, I made recommendations to both the Federal and NSW Parliaments in relation to both Modern Slavery Bills, and I was a part fo the parliamentary inquiries on slavery for both of these jurisdictions, and other Committee hearings, giving evidence on slavery and human trafficking in our region since 2012. Therein theme of my recommendations focused on the importance of not only having regulatory measures in place for corporations to ensure that slavery in their business supply chains are addressed, but that deeper culture change needs to occur through due diligence human rights practices.

Australia's Modern Slavery Act (Cth) 2018 calls for corporations above a $100m threshold to report on slavery in their supply chains in a public repository. The legislation establishes a Modern Slavery Reporting Requirement requiring Australian entities and foreign entities carrying on business in Australia to submit Modern Slavery Statements every twelve months if above the annual revenue of at least $100 million AUD, with the first of these statements due for publication at the end of this financial year.

The Modern Slavery Reporting Requirement's primary objective is to assist the business community in Australia to take proactive and effective actions to address modern slavery, aiming to mitigate the risk of modern slavery practices occurring in the supply chains of goods and services in the Australian market, with a requirement in the Statement to cover mandatory criteria, including the potential modern slavery risks in the entity's operations and supply chains, and actions the entity has taken to assess and address those risks, including due diligence and remediation processes.

Regulation versus Due Diligence Practices

The implementation of a human rights due diligence culture and practice seeks to uphold the dignity of all persons and refuses to allow slavery in commercial supply chains to exist on principle as a way of combating slavery by shifting consumer and commercial culture, practice and expectations.

Both the Californian and UK laws lack a due diligence element that the equivalent French law somewhat reflects. In early 2017, the French Parliament adopted Law No. 2017-399 on corporate 'duty of care' (devoir de vigilance) for parent and subcontracting companies. The French law encourages the practice of the principle of duty of care - more in line with due diligence human rights standards. There is international precedent that this is the best and most effective way forward.

The UN Guiding Principles Reporting Framework defines human rights due diligence as: "[A]n ongoing risk management process… in order to identify, prevent, mitigate and account for how [a company] addresses its adverse human rights impacts, and includes four key steps.

Article 2 of the International Labour Organisation Protocol establishes that member states should take measures 'supporting due diligence by both the public and private sectors to prevent and respond to risk of forced or compulsory labour', including a strong focus on prevention and the education of those considered particularly vulnerable, employers and the wider public on the realities, harms and dangers of forced labour.

Universal Peace Based on Social Justice

For decades now, international instruments have linked social justice to stable economies and political and military peace. In fact, the International Labour Organisation's origins are foundin the Peace Conference and was entrusted with working towards several social justice objectives and was given the competence to adopt international labour standards as its principal means of action.

Part XIII of the Treaty of Versailles was the outcome of the Commission's work, becoming the founding text of the ILO, with the Preamble to Part XIII of the Treaty of Versailles stating: "Whereas the League of Nations has for its object the establishment of universal peace, and such a peace can be established only if it is based upon social justice ...".

The world has recognised that the principle of social justice requires a due diligence human rights approach to the eradication of slavery, trafficking and criminality of all kinds in the labour force globally for the sake of global peace, security and justice, with the Forced Labour Protocol recognising that the prohibition of forced or compulsory labour forms part of the body of fundamental rights, and that forced or compulsory labour violates the human rights and dignity of millions, contributing to the perpetuation of poverty and stands in the way of the achievement of decent work for all.

TheInternational Labour Organisation's International Protocol P029 of 2014 to the Convention Concerning Forced or Compulsory Labour (the Forced Labour Convention of 1930) establishes that the obligations to prevent forced labour, protect victims and provide them with access to remedies, and emphasises the link between forced labour and trafficking in persons. In line with Convention No. 29, the Protocol also reaffirms the importance of prosecuting the perpetrators of forced labour and ending their impunity.

The French duty of care law is the most compliant in principle with the principles of universal peace based on social justice, as it requires companies to develop and implement a public 'devoir de vigilance' setting out the oversight mechanisms the company has in place to identify and mitigate the occurrence of violations of human rights and fundamental freedoms. The French law does not explicitly refer to the UN Guiding Principles' standard of human rights due diligence, but it specifies the content of the due diligence plan.

This central principle of due diligence human rights standards was left out of the Californian, UK, and now Australian laws which seeks to eradicate slavery in commercial supply chains. In other words, the transparency in supply chain laws miss the opportunity in its legislation to uphold the principle of social justice by requiring a due diligence human rights approach to the eradication of slavery, trafficking and criminality of all kinds in the labour force globally in the pursuit of working towards global peace, security and justice.

Why Reporting Matters

Now more than ever, companies, governments, investors, civil society and others are realising that doing business with respect for people's fundamental dignity and welfare just makes sense, is more sustainable, that it is more complaint with universal human rights standards, that it upholds the rule of law, dignity and equity principles and due diligence ethical requirements.

Doing business with slave-free supply chains makes sense because it helps protect and create long-term social, economic and even environmental value. The Australian Reporting Requirement for companies above the proposed threshold will enable civil society to get a better understanding of potential slave-like practices in commercial supply-chains into, and out of Australia.

So, to the question: Will the Modern Slavery Act as a Regulatory Tool be Effective in Disrupting Slave Labour in Australian Business Supply Chains? This is yet to be seen.

The required Reports due for submission at the end of this financial year is the starting point for Australian businesses to clean up their human rights records, and work towards a dignity-centred workforce in our region. Let the reporting begin!

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About the Author

Andrea Tokaji is a lecturer in Business and Law at Sheridan, Perth, and is a trained international human rights lawyer.

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