Introduction and
background
1.1
On 28 June
2018, the Senate referred the provisions of the Modern Slavery Bill 2018 (the
bill) to the Legal and Constitutional Affairs Legislation Committee (the
committee) for inquiry and report by 24 August 2018.[1]
1.2
The Selection
of Bills Committee of the Senate recommended that the provisions of the bill be
referred to the committee, as:
- the proposed legislation is the first of its kind in Australia;
and
-
there is a need to consider expert views on potential impacts of
the bill and possible improvements.[2]
1.3
This chapter provides a brief overview of the background and purpose of
the bill. A more detailed explanation of the bill is provided in the next
chapter.
Background and purpose
of the bill
1.4
According to
the Explanatory Memorandum, the primary objective of the bill is to assist the
Australian business community take 'proactive and effective actions' to address
modern slavery, and mitigate the risks to supply chains and goods and services
in the Australian market.[3] Additionally, the bill is also intended to increase the information available
to consumers and investors about the risks of modern slavery practices, so they
are better able to make informed decisions.[4]
1.5
The bill
would establish the Modern Slavery Act 2016 (the Act). The Act would
require certain large businesses and other entities to lodge Modern Slavery
Statements (statements) annually, to fulfil the Act's Modern Slavery Reporting
Requirement (reporting requirement). These statements would detail the actions entities
have taken to address modern slavery risks in their operations and supply
chains, and be provided to the Minister for Home Affairs (Minister) for
publication on an online central register.[5]
1.6
The
Explanatory Memorandum explains that the reporting requirement would:
...drive a 'race
to the top' as reporting entities compete for market funding and investor and
consumer support. The Bill also aims to increase awareness of modern slavery
risks among the Australian business community, and assist investors and
consumers to make more informed decisions when using, buying and selling goods
and services.[6]
1.7
The bill
provides that entities that meet a $100 million consolidated revenue threshold
for turnover globally would be liable to lodge statements.[7] Companies with turnovers that fall beneath the threshold would be able to
comply with the reporting requirement on a voluntary basis.[8] The Commonwealth would also be liable to submit a 'consolidated annual
[statement] on behalf of all non-corporate Commonwealth entities', except when
corporate Commonwealth entities or companies meet the revenue test and must therefore
lodge a statement themselves.[9]
1.8
The bill
would establish a Modern Slavery Business Engagement Unit (Business Engagement Unit)
within the Department of Home Affairs (the department), to 'ensure business is
appropriately supported to address modern slavery risks in their supply chains'.[10] The 2018 Federal Budget committed $3.6 million to establish and administer
this unit from January 2018 to June 2022.[11]
The global challenge of
slavery
1.9
In his second
reading speech, the Assistant Minister for Home Affairs, the Hon Alexander
Hawke MP, underlined the extent of the challenge of modern slavery in the world
today, and the pressing need for action:
The UN
estimates that up to 25 million modern slavery victims are exploited in global
supply chains.
This
includes over 4,000 people in Australia estimated to be enduring slavery or
slave-like conditions.
These
victims are enslaved in mines, in factories, in brothels, in brick kilns, and
on construction sites, fishing boats and farms around the world.
Their
exploitation involves serious crimes and grave human rights abuses and taints
the goods and services that we use every day.
Modern
slavery in supply chains also distorts global markets, undercuts responsible
businesses, and poses significant legal and reputational risks for companies. [12]
1.10
It is
difficult to overstate the heinous nature of modern slavery practices, or the
damage these practices cause. Modern slavery practices, as the Explanatory
Memorandum observes:
...are
major violations of human rights and serious crimes. Modern slavery practices
include trafficking in persons, slavery, slavery-like practices (including
forced labour and forced marriage) and the worst forms of child labour
(including using children for prostitution or in hazardous work).[13]
Risks
in Australia
1.11
The risk of
exposure to modern slavery is a very real and current problem for Australian
businesses. As the Explanatory Memorandum points out, there is a 'high risk'
that Australian businesses are exposed to modern slavery practices, and that
Australian goods and services 'are tainted by modern slavery'.[14]
1.12
Exposure to
modern slavery can occur at any point in a supply chain, including those parts
of a supply chain located within Australia. Nonetheless, the risk of such
exposure may be heightened for Australian businesses and other entities that
rely on global supply chains, particularly where those supply chains are
especially complex and/or extensive. The United Nations has estimated that
there are more than 40 million victims of modern slavery worldwide; more
than half of these victims live in the Asia-Pacific region, where the supply
chains of many large Australian businesses are concentrated.[15]
1.13
Incidences of
modern slavery or slavery-like practices can be found in any industry or
sector. However, certain industries are considered particularly high-risk, due
to their trans-national supply chains. These industries include agriculture,
construction, electronics, extractives, fashion and hospitality.[16]
Legal
frameworks to address modern slavery in other jurisdictions
1.14
The
Australian Government is not alone in introducing legal frameworks aimed at
addressing Modern Slavery. For example, the United Kingdom enacted the Modern
Slavery Act 2015 (UK Act) in 2015 and, in Australia itself, the New South Wales
government passed legislation aimed at tackling modern slavery in June 2018.
There have also been similar regimes introduced across the European Union, in
some states and sectors of the United States, and in other parts of the world.[17]
1.15
The UK and New
South Wales frameworks share the same goals and broad approach of the current bill.
However, there are notable differences, which will be discussed in the second
chapter of this report.
'Hidden
in Plain Sight' report
1.16
The bill currently
under consideration was developed following the inquiry into establishing an
Australian Modern Slavery Act undertaken in 2017 by the Joint Standing
Committee on Foreign Affairs, Defence and Trade of the Australian Parliament
(Joint Committee). The Joint Committee's report, Hidden in Plain Sight,
was tabled in December 2017, and was informed by 225 submissions and 10
public hearings. Evidence was received from individuals, businesses, and
organisations that work to eradicate modern slavery, including from global
supply chains, along with relevant Commonwealth departments.[18]
1.17
As part of
its inquiry, the Joint Committee assessed in detail the effectiveness of the UK
Act, and considered whether similar or improved measures should be introduced
in Australia. The report made 48 recommendations, including the central
recommendation calling for:
...the
establishment of an Australian Modern Slavery Act, including an Independent Anti-Slavery
Commissioner to lead and coordinate Australia's response to combatting modern
slavery. Evidence suggests that the UK Commissioner has made an important
contribution to raising awareness of modern slavery, better coordinating UK law
enforcement agencies and advocating for improved supports for victims.[19]
1.18
To address
the risks of modern slavery practices in supply chains, the Joint Committee
recommended the Act should include a mandatory global supply chain reporting
requirement for certain entities operating in Australia. Entities subject to
the proposed reporting requirement would need to 'take responsibility to ensure
that they are not profiting, or gaining a competitive advantage, from modern
slavery in their global supply chains'.[20]
1.19
The Joint Committee
further recommended that statements made under the reporting requirement be
held in a central repository.[21]
1.20
The Joint Committee
also made recommendations in a number of other relevant areas, including:
- changes to
the way Australia's victim identification and support programs operate,
including a national compensation scheme;
- improving
coordination and training for Australia's law enforcement and criminal justice
agencies;
- a series of
measures to ensure Australian donations and volunteers do not inadvertently
perpetuate orphanage trafficking and the exploitation of children
internationally; and
- better
protections in Australia's visa framework for migrant workers and backpackers
in regional areas.[22]
Consultation in
developing the bill
1.21
The measures
in the bill were developed after the government undertook a consultation
process to ascertain the views of the business sector, relevant NGOs, and
interested individuals, as outlined in the Explanatory Memorandum:
To ensure
full public consultation, Government conducted a two-phase consultation
process. The first phase of consultations involved a series of 12 stakeholder
roundtables in Canberra, Melbourne, Sydney and Perth. More than 130
representatives from business and civil society attended these roundtables. The
second phase of consultations involved seeking written submissions from
interested stakeholders. The Australian Government received 99 written
submissions addressing the key areas for feedback set out in the consultation
paper. In addition to formal consultations, the Australian Government has held
more than 50 direct meetings with interested stakeholders. The Australian
Government also held targeted exposure draft consultations on draft legislation
with over 40 expert stakeholders between 29–30 May 2018.[23]
Human rights
1.22
The Explanatory Memorandum contains a statement of compatibility with
human rights confirming the bill is compatible with all Australia's
international obligations listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011. The Explanatory Memorandum further
concludes that the bill is compatible with Australia's human rights commitments
because:
...it
promotes the protection of a number of human rights, including absolute rights to
freedom from slavery and forced labour and to freedom from torture and other
cruel, inhuman or degrading treatment or punishment. To the extent that the
Bill may limit the right to privacy and reputation, those limitations are
reasonable, necessary and proportionate to the legitimate objective of the
Bill, which is to strengthen Australia's approach to modern slavery by
equipping and enabling the business community to respond effectively to modern
slavery and develop and maintain responsible and transparent supply chains.[24]
Financial implications
1.23
The
Regulation Impact Statement included in the Explanatory Memorandum states that the
bill would have an annual regulatory impact on the business community of
approximately $65.85 million ($21,950 per reporting entity).[25]
1.24
As noted
above, the 2018 Federal Budget committed $3.6 million to establish the
Business Engagement Unit within the department.[26]
Conduct of the inquiry
1.25
Details of
the inquiry were published on the committee's website, including a call for submissions
to be received by 20 July 2018. The committee also wrote to a number of
relevant individuals and organisations inviting them to make submissions.
1.26
The committee
received 93 submissions, which are listed at appendix 1 of this report. All
submissions are available in full on the committee's website.
1.27
The committee
held three public hearings, in Melbourne on 1 August 2018, in Sydney on 2
August 2018, and in Canberra on 3 August 2018.
Structure of this
report
1.28
This report
consists of three chapters. In addition to this introductory chapter:
- chapter two
provides an outline of the bill's provisions, and then sets out the general
support for the bill in evidence received by the committee; and
-
chapter three
offers an overview of the evidence received regarding potential improvements
that could be considered by the government, and in turn sets out the committee's
views and recommendations.
Acknowledgements
1.29
The committee thanks all the organisations and individuals that
made submissions to the inquiry, as well as those that gave evidence at public
hearings.
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