This blog will help you understand what the different announcements mean, how they fit together and how the policy positions of our two major parties compare with what we have been calling for. For more detail you can download our full explainer of the Modern Slavery Act in Australia here.

Slavery and Corporate Supply Chains

Slavery remains a substantial global problem. One of the most profound things industrialised nations can do to end this horrible global practice is ensure that multinational businesses are taking sufficient action to keep slavery and exploitation out of their operations

Legislation to help do this has been introduced in the United Kingdom, the United States, France, the Netherlands and Europe. Australia, now lagging these regions, launched a parliamentary Inquiry in February this year to assess whether such legislation should be introduced here.

The answer has been a resounding yes, with bipartisan commitment to a Modern Slavery Act in Australia.

The Inquiry also was tasked to consider what should be included in this act. Prior to the Inquiry reporting back, Labor announced a policy framework for supply chain regulation, while the Coalition Government put forward a policy proposal and launched a public consultation. A day after the Government’s announcement last week, the Inquiry released its interim report.

So what’s the difference between the two parties, what is the interim report from the Inquiry recommending, and how does it compare to our asks?

This table helps explain the state of play.

Legend

Ask reflected in our policy proposal

Clarification or more information needed

Ask rejected in policy proposal

Ask 1. Mandatory Due Diligence Reporting.

Mandatory reporting to demonstrate what level of care, research and effort a company has undertaken to avoid modern slavery.

LaborCoalition GovernmentInquiry Interim Report

Included in Labor platform.

“…each statement must include specific info about supply chain, where risk has been identified, what steps have been taken to ensure there is no slavery, training to staff, whether slavery has been found and what action has been taken”

Included but qualified. Policy needs clarity.

“entities will also have the flexibility to determine what, IF ANY, information they provide against each of the four criteria”

The recommended content for a mandatory reporting requirement is being held over until the final report.

“The Committee is of the view that its final report further consider due,diligence requirements,”

Ask 2. At least, all companies with revenue greater than $58 million.

This is approximately equivalent to the £36 million threshold in the United Kingdom, and we know that at this scale, companies should have sufficient influence and resources for an effective labour rights management system.

LaborCoalition GovernmentInterim Report

Yet to be defined by the Labor proposal.

Currently calling for “Major Australian Companies”

Threshold set at $100m. Higher than recommended.

“…no lower than $100m total annual revenue”

To be determined in its final report.

“The exact threshold will be considered further in the Committee’s final report”

Ask 3. Modern Slavery Statements should be hosted in a free central repository, either hosted or funded by the Government. They should also be on individual company websites.

LaborCoalition GovernmentInterim Report

Included in Labor proposal.

Included in Government proposal

Included as a recommendation of the interim report, with an additional compliance measure:

“publish a list of companies, businesses, organisations and governments above the threshold that do not comply”

Ask 4. Modern Slavery Statements should be approved by the board of directors.

LaborCoalition GovernmentInterim Report

Approval process not defined in Labor’s proposal

Included in Government proposal

Included as a recommendation of the interim report.

Ask 5. Companies should face significant penalties for non-compliance to the reporting requirement.

Lack of sufficient penalties has been identified as a significant weakness in the comparative legislation in the UK and the US. We consider this a critical measure to give the legislation weight.

LaborCoalition GovernmentInterim Report

Included in Labor proposal.

Penalties are not to be included under the Government proposal.

“Will not include punitive penalties for non-compliance….”

Included as a recommendation of the interim report.

Ask 1. Mandatory Due Diligence Reporting.

Mandatory reporting to demonstrate what level of care, research and effort a company has undertaken to avoid modern slavery.

Labor

Included in Labor platform.

“…each statement must include specific info about supply chain, where risk has been identified, what steps have been taken to ensure there is no slavery, training to staff, whether slavery has been found and what action has been taken”

Coalition Government

Included but qualified. Policy needs clarity.

“entities will also have the flexibility to determine what, IF ANY, information they provide against each of the four criteria”

Inquiry Interim Report

The recommended content for a mandatory reporting requirement is being held over until the final report.

“The Committee is of the view that its final report further consider due,diligence requirements,”

Ask 2. At least, all companies with revenue greater than $58 million.

This is approximately equivalent to the £36 million threshold in the United Kingdom, and we know that at this scale, companies should have sufficient influence and resources for an effective labour rights management system.

Labor

Yet to be defined by the Labor proposal.

Currently calling for “Major Australian Companies”

Coalition Government

Threshold set at $100m. Higher than recommended.

“…no lower than $100m total annual revenue”

Interim Report

To be determined in its final report.

“The exact threshold will be considered further in the Committee’s final report”

Ask 3. Modern Slavery Statements should be hosted in a free central repository, either hosted or funded by the Government. They should also be on individual company websites.

Labor

Included in Labor proposal.

Coalition Government

Included in Government proposal

Interim Report

Included as a recommendation of the interim report, with an additional compliance measure:

“publish a list of companies, businesses, organisations and governments above the threshold that do not comply”

Ask 4. Modern Slavery Statements should be approved by the board of directors.

Labor

Approval process not defined in Labor’s proposal

Coalition Government

Included in Government proposal

Interim Report

Included as a recommendation of the interim report.

Ask 5. Companies should face significant penalties for non-compliance to the reporting requirement.

Lack of sufficient penalties has been identified as a significant weakness in the comparative legislation in the UK and the US. We consider this a critical measure to give the legislation weight.

Labor

Included in Labor proposal.

Coalition Government

Penalties are not to be included under the Government proposal.

“Will not include punitive penalties for non-compliance….”

Interim Report

Included as a recommendation of the interim report.

How or why have both parties put forward a policy platform ahead of the findings from the ongoing parliamentary Inquiry?

The Inquiry is still playing a significant role. Submissions for the Inquiry and the stakeholder evidence has helped shape the policy platforms of the respective parties. MP Chris Crewthers, the chair of the Inquiry, has also indicated that the final content of the Government’s proposed legislation will continue to be influenced by the Inquiry’s findings.

It is also worth to note that the scope of the Inquiry goes beyond just supply chain requirements, and includes scope for recommendations on domestic slavery legislation and areas like orphanage tourism. Neither party has put forward a position on these issues and will presumably rely on the Inquiry to shape their proposals.

However, it seems likely that there will be some doubling up between the public consultation of the Coalition and the work of the Inquiry- a relatively minor inconvenience if it doesn’t impede the development of robust legislation.

Where Does This Leave Us?

The momentum for a Modern Slavery Act is promising. We are concerned about the Government’s reluctance to include penalties in its proposed legislation, and the higher proposed reporting threshold it is recommending. We are also waiting to see what penalties the Labor party proposes as they finalise their policy proposal.

For now though, we will continue to work with you to express our thanks to both sides of politics for their commitments to tackling slavery in supply chains, while still campaigning to ensure that the final legislation is as robust as possible.