Show me the receipts (Part 2)
Australia is proposing to hold businesses criminally accountable for failing to prevent modern slavery. Here are my thoughts, in 3 parts.
[You are here] Part 2: whether it’s enough.
Part 3: what businesses are actually expected to do.
Australia is catching up, but not leading
Since the Modern Slavery Act was enacted, Australia’s federal framework has required large entities to report. It is a law built on description.
Describe your structure, operations and supply chains. Describe your identified risks. Describe your actions taken. Describe how you assess effectiveness. And then let people decide if you did enough.
Those requirements mattered. They created visibility and a common language.
But as we all know, and as the benchmarks keep pointing out, a company can publish a polished statement, maintain a policy, send questionnaires and conduct assessments without materially improving conditions for workers.
So in this context, the Government announcement is a welcome move away from disclosure alone and asking for “the receipts”.
The law isn’t written yet, but it’s safe to predict that to manage liability under this new model, companies should have to show what it actually did, found, changed and addressed.
For those of us who have spent years pulling our hair out that human rights work must be more than writing a modern slavery statement (and being frustrated that the statement is often the only thing the business funds) this is good news.
But, hang on. Productivity!
Productivity (every politician’s favourite buzz word) is the frame that many businesses and government departments are working within right now, and any reform for modern slavery will get measured against it and for which business leaders will critique it against.
But let’s frame the issue appropriately.
The Productivity Commission described poorly designed or implemented regulation as a handbrake on growth. The Government’s regulatory reform agenda is organised around better regulation – regulation that is simpler, more effective, better targeted.
Now apply that test to where we already are.
Thousands of modern slavery statements are being published. Yet, the McMillan statutory review found no hard evidence that the Act had caused meaningful change for people living in modern slavery. Reporting still has an important place. But somehow along the way, we lost our focus on how reporting is just the output, not the goal. Let’s face it, even now no one wants to a read a 40-page modern slavery statement (let alone write one).
Yes, we need better regulation.
So what does that look like?
Receipts are cheaper than a pandemic
Someone recently made this point better than I can.
At a law conference recently, a speaker on a panel about project finance and making good project decisions (not a human rights panel!) shared her reflections. During COVID when companies were scrambling to identify suppliers and secure sources of supply, those with effective modern slavery due diligence programmes were commercially a step ahead. The traceability and mapping gave them better visibility, resilience and market access at a moment of acute supply chain stress.
To labour the point, it wasn’t companies who had a modern slavery statement didn’t perform better. It was companies who had a statement that described an effective due diligence programme.
Surely this is a productivity win. It just took a pandemic to make it visible.
I’d argue the productivity risk is actually if any updated law ends up creating a culture of compliance and a “minimum mindset”.
This law is only one important step.
The conversation in Australia is still confined to modern slavery, while other jurisdictions are moving towards broader human rights and environmental due diligence, forced-labour import controls and stronger enforcement.
For example, the EU’s CSDDD and Thailand’s recently approved controls on imported goods at risk of forced labour show the direction of travel. The Canadian Government just announced consultations for potential high risk list of forced labour goods and potential due diligence and civil liability measures.
Australia needs to seriously consider a range of measures to embed and enforce business respect for human rights.
And while everyone is feeling fatigued, stressed and stretched - I would urge now is the time for business, for civil society, for academics, for unions, for lived experience advisors to provide feedback on what is productive, better regulation.
Moving towards holding businesses accountable for crimes of modern slavery is a welcome step forward, but it’s no silver bullet solution. We need to broaden our discussion beyond modern slavery, beyond reporting and look at a smart mix of regulation measures and keep up with the world who is moving faster than we are!
We are improving the foundations, but we are nowhere near the finish line.
And finally, read Part 3 is where I answer the question we started with – what is the minimum companies have to do. Itinvolves a rusty tin box.