Investigation shows companies still failing to act on modern slavery

A coalition of human rights organisations and academics are calling on the Federal Government to overhaul Australia's modern slavery laws after a major investigation has found, three years into the Act’s operation, companies are still failing to identify obvious modern slavery risks in their supply chains or take action to address them.

The report, Broken Promises: Two years of corporate reporting under Australia’s Modern Slavery Act, examines the second year of corporate statements submitted to the Government's Modern Slavery Register by 92 companies sourcing from four sectors with known risks of modern slavery: garments from China, rubber gloves from Malaysia, seafood from Thailand and fresh produce from Australia. 

It found that:

  • 66% of companies reviewed are still failing to comply with the basic reporting requirements mandated by the legislation, with some companies not submitting reports at all;
  • 56% of the commitments made by companies in the first year of reporting to improve their modern slavery response remained unfulfilled based on their second year statements;
  • 43% of companies reviewed are still failing to identify obvious modern slavery risks in their supply chains;
  • There is a 6% increase in the number of companies appearing to be taking some form of effective action to address modern slavery risks, with two in three companies still failing to act.

Broken Promises: Two years of corporate reporting under Australia’s Modern Slavery Act is the follow up report to Paper Promises? Evaluating the early impact of Australia’s Modern Slavery Act, which was released earlier this year. The Modern Slavery Act 2018 (Cth) is currently under a three-year statutory review led by Professor John McMillan AO. It is due to report in March 2023. 

The coalition of human rights organisations are calling on the Government to urgently act to strengthen the legislation by:

  • Requiring companies to undertake due diligence to prevent and address modern slavery in their operations and supply chains;
  • Introducing penalties for companies that fail to comply with the Act;
  • Ensuring appropriate oversight and enforcement of the Act by appointing an Independent Anti-Slavery Commissioner.

Professor Justine Nolan, Director, Australian Human Rights Institute (UNSW Sydney):  

“It is time for Australian companies to move from ‘paper-driven’ responses to effective action on modern slavery. Too many companies are still failing to identify obvious risks or are simply making vague promises that are not being fulfilled. 

"While the Modern Slavery Act has generated increased business awareness of the risks of modern slavery, this has not yet translated into effective practices to remediate and eliminate it. 

"This report reveals an urgency to strengthen the law to require action not just reporting, as well as to equip and resource a regulator to provide greater oversight and enforcement of the Act.”

Freya Dinshaw, Senior Lawyer, Human Rights Law Centre:

“Our research indicates that the Modern Slavery Act is currently failing workers. While the Act has generated a lot of corporate reporting, when you drill down, many of the statements still lack basic required information or make vague commitments which are never fulfilled. There is little evidence the law is driving meaningful action by companies to lift conditions for supply chain workers at high risk of exploitation.

"Our modern slavery laws need to evolve so that they put people, rather than paperwork, at their centre. In order to be more effective, the Act should be amended to require companies to take action to address modern slavery risks rather than just reporting on their current practices. It should impose penalties on companies that fail to do so and have robust oversight and enforcement by an independent Anti-Slavery Commissioner. We urge the Government to use the current statutory review to make these key reforms to strengthen the law.”

Amy Sinclair, Regional Representative for Australia, New Zealand & Pacific, Business and Human Rights Resource Centre:  

“The Modern Slavery Act has failed to instigate a ‘race to the top’ by companies wanting to confront modern slavery, more of a slow crawl; with companies averaging a mere 7% rate of improvement in two years.

"These results should be viewed against a backdrop of growing inequality and exploitation of workers as the cost of living crisis bites ever harder.

"Our research has revealed the Act to be an incomplete and inadequate strategy for confronting exploitation and addressing the egregious human rights abuse of modern slavery. To best do this, Australia requires a more robust law requiring decisive action by companies and penalties for those who fail to take it.”