SPOTLIGHT ON The Issue According to the Global Modern Slavery Index an estimated 40.3 million men, women, and children were victims of modern slavery on any given day in 2016. Of these, 24.9 million people were in forced labour and 15.4 million people were living in a forced marriage. Women and girls are vastly over-represented, making up seventy- one percent of victims. In the past five years, 89 million people experienced some form of modern slavery for periods of time and collectively approximately US$150 billion per year is generated in the global private economy from forced labour. Modern slavery is most prevalent in Asia and the Pacific region. Sixty-two percent of all people enslaved, or twenty-five million people in the Asia-Pacific Region are ‘enslaved’ including 4,300 people in Australia. The Road to Regulation Since 2010 policies have been introduced in California, France, Italy, the EU and the UK. Most recently, the Australian government has consulted on introducing a Modern Slavery Act — focused on supply chain transparency and corporate reporting. In February 2017 the Australian government commenced an enquiry into establishing a Modern Slavery Act in Australia. Around 200 submissions from corporations and organisations were received and considered prior to the release of an interim report. Based on current predictions, legislation may be introduced mid-2018, with enactment expected in 2019. The legislation is expected to bring reporting requirements into closer alignment with other jurisdictions, particularly with the transparency provisions (s54) in the UK Modern Slavery Act. The UK Act requires organisations to publish a slavery and human trafficking statement that addresses information such as its due diligence processes in relation to slavery in its business and supply chains. What is the aim of the Modern Slavery Act? The government has expressed that the proposed legislation is intended to “equip and enable the business community to respond effectively to modern slavery and develop and maintain responsible and transparent supply chains.” Many forms of modern slavery and exploitation are already illegal in most jurisdictions, and in Australia is it covered by the Commonwealth Criminal Code. The Australian government plans to consolidate Australian law within a Modern Slavery Act (similar to the UK Act) and introduce new provisions for corporate disclosures and reporting. By requiring organisations to disclose what actions they are taking to identify, mitigate, and remedy incidents of modern slavery in their supply chains — the government aims to initiate a “race to the top”, and provide stakeholders with information to hold organisations accountable for managing human rights risks in their supply chains. What does it mean? Mandatory disclosures of steps taken by businesses to prevent modern slavery in the supply chain implicitly requires them to ensure that their supply chain due diligence procedures will meet stakeholder expectations. The implication being that disclosure can invite comparison, scrutiny, and increased stakeholder demands if expectations are not met. For businesses, greater transparency also facilitates industry collaboration and is expected to ultimately improve supply chain conditions — which may in turn help support security of supply and their own sustainable procurement practices. Who is required to report? The initial proposal suggests that reporting requirements will apply to all entities that carry out business in Australia with revenues over AUD$100m. However, there are other recommendations to reduce the threshold to closer to AUD$60m in line with the UK threshold, or potentially lower — as well as including an option for any entity to “opt-in” to report despite not being caught by the revenue threshold. The public sector is not currently included, however one possibility may be to include them by requiring that they only procure from entities that have published a Modern Slavery Statement in accordance with the proposed legislation. MODERN SLAVERY; INCLUDING SERVITUDE, FORCED LABOUR, AND CHILD LABOUR CONTINUES TO OPERATIONS AND SUPPLY CHAINS OF BUSINESSES WORLD-WIDE WHETHER THEY ARE AWARE OF AN UNDER-REGULATED AREA OF CORPORATE ACTIVITY IS NOW ATTRACTING INCREASED ATTENT __________ This Spotlight includes information provided by AusLSA’s Partner - EY