Efforts to increase transparency around modern slavery risks in companies’ operations and supply chains have dominated the business and human rights discourse to date. Here, we provide recent updates from Australia and the 72nd Session of the UN General Assembly.
Australia proposes Modern Slavery in Supply Chains Reporting Requirement
Legal reporting requirements about companies’ human rights policies and practices broadly, and slavery and trafficking specifically, are already on the books in EU directives and the laws of the UK, France, and California. The United States recently eliminated the consumptive demand loophole under the U.S. Tariff Act and introduced new anti-human trafficking requirements for federal contractors. In the Netherlands, a child labor due diligence law is under review.
On August 16, following long discussion on the topic, the Australian government issued a consultation paper outlining its proposal to create its own targeted regulatory action. The publication refers to Australia’s National Action Plan to Combat Human Trafficking and Slavery 2015-19, which was issued in 2014 and provides a strategic framework for Australia’s response to these issues.
A public consultation on the proposed requirement, which would be established through a new Act of Parliament as opposed to amending existing legislation, is now underway. Subject to feedback from the business community and civil society, the Minister for Justice has proposed to bring forward draft legislation in the first half of next year.
Key elements of the proposed requirement are as follows:
Application: The requirement would apply to any entity headquartered in Australia or with any part of its operations in Australia that additionally meets the revenue threshold (global turnover of not less than AUD 100M). The government proposes to define “entity” broadly and not limit the requirement to high-risk sectors or importers.
Publication: A covered entity would be compelled to produce an annual slavery and human trafficking statement approved by the company’s board and signed by a director and published on the entity’s homepage. The government is additionally considering creating a free, publically accessible central repository of statements.
Timeline: Statements must be posted within five months after the end of the Australian financial year, although the government may adopt a phased approach to give companies sufficient time to prepare statements.
Content: Companies would be required to report against a consolidated set of four criteria that cover the optional criteria found in the UK Modern Slavery Act: namely, information about (i) the entity’s structure, operations and supply chains; (ii) modern slavery risk in the entity’s operations and supply chains; (iii) modern slavery-focused policies and process applicable to operations and supply chains and their effectiveness (such as codes of conduct, supplier contract terms and training for staff); and (iv) modern-slavery focused due diligence processes applicable to operations and supply chains and their effectiveness. The consultation paper states that entities will have the ability to determine what, if any, information they provide against the four criteria and whether to provide additional information.
Terminology: In terms of defining modern slavery, the requirement will incorporate conduct that would constitute a relevant offense under the existing human trafficking, slavery and slavery-like offense provisions set out in Divisions 270 and 271 of the Commonwealth Criminal Code. In addition, the government proposes to extend the definition of “supply chains” beyond Tier 1 suppliers.
Penalties: The government plans to monitor general compliance, and noncompliant companies will face no punitive penalties but may be subject to “public criticism.” No private right of action is mentioned.
Benchmarking: The government finally states that it will consider supporting “analysis and benchmarking efforts” related to statements.
The public is invited to submit feedback until October 20 (you can find current submissions here) and stakeholder roundtables will be held through December.
Call to Action at UN General Assembly
In other news, at a September 19 roundtable organized by the UK Prime Minister during the 72nd Meeting of the UN General Assembly, 37 countries endorsed a Call to Action to end abuses associated with forced labor, modern slavery, human trafficking, and the worst forms of child labor by 2030. The countries committed to doing so by taking steps to implement Sustainable Development Goal 8.7.
By way of background, the Sustainable Development Goals (or SDGs) are a set of 17, non-binding international development goals adopted by over 150 countries two years ago as part of a broader sustainable development agenda. They build upon the UN Millennium Development Goals and are designed to improve the quality of life by promoting economic growth, social inclusion and environmental protection.
Each SDG goal has associated targets and SDG Goal 8, which calls for the promotion of inclusive and sustainable economic growth, employment and decent work for all, has 12 targets. Target 8.7, which is the focus of the Call to Action, calls for effective measures to end forced labor, modern slavery, human trafficking and child labor. The Call to Action specifically commits participants to implement Target 8.7 by (among other things):
- Ratifying and implementing relevant international conventions, protocols, and frameworks, including the Palermo Protocol (which provides a definition of human trafficking), and developing and hastening the implementation of effective domestic legislation;
- Adopting comprehensive national strategies and addressing issues in both formal and informal economies via regulatory or policy frameworks;
- Working with businesses on their supply chain issues and addressing government procurement practices;
- Fortifying law enforcement and criminal justice responses and working to secure access to justice for victims; and
- Building general consumer awareness around these issues.
The States that endorsed the Call to Action include both UN Member and Non-member Observer States: Argentina, Australia, Bahrain, Bangladesh, Belgium, Brazil, Bulgaria, Canada, China, Colombia, Côte D'Ivoire, Denmark, Ethiopia, Ghana, Holy See, Italy, Japan, Jordan, Kenya, Lichtenstein, Malaysia, Malta, Nepal, New Zealand, Nigeria, Norway, Qatar, Republic of Korea, Saudi Arabia, Senegal, Slovakia, Spain, Sri Lanka, Turkey, United Kingdom, United States of America, and Zambia.
We will continue to monitor developments.