The recent appointment of an Australian Anti-Slavery Commissioner means it’s time to back the legislation with tangible action. But do boards need to go further still?
Australian boards must place basic civil rights in every aspect of a company’s culture or the country will lose its status as the global leader in the fight against modern slavery. That’s the view of Professor John McMillan AO, who in 2023 handed down the results of a three-year independent review that had been built into the Modern Slavery Act 2018 legislation.
That report included multiple recommendations. While most of them are still under review, the government has appointed a dedicated Anti-Slavery Commissioner, Chris Evans, who began his five-year term on 2 December 2024.
“This should signal to Australian companies and their boards that the parliament has listened,” he says. “My office is here to help businesses meet their obligations in a meaningful and impactful way, but we will also call out where we see opportunity for change. Robust human rights due diligence must be embedded in the way of doing business, and reporting under the Act should not be a ‘tick-and-flick’ exercise. We intend to make sure Australian companies have continuing access to the tools and resources they need to conduct the effective risk-based due diligence that ultimately helps to inform their purchasing decisions.”
Evans is the former CEO of international human rights group Walk Free and was a West Australian senator from 1993–2013. He will be looking at global legislative trends before forming a view on any potential enhancements to the Act.
“Australia should continue to be a leader in the fight against modern slavery and, in doing so, businesses operating in Australia should have confidence in both the local and global regulatory environment,” he says.
“My office will soon start consultation on the strategic plan and we want to hear about the needs, challenges and priorities of businesses, those with lived experience, and industry and supply chain participants. I urge businesses to be engaged in that process.”
A burning question
In the Act’s current iteration, there are no penalties for failing to submit a report or for including an incomplete or misleading statement. There are also no due diligence requirements.
“The McMillan Report recommends that new penalties are introduced for entities that fail to implement a comprehensive due diligence system,” says Dr Meg Brodie, who is partner in charge of the specialist human rights, social impact, safety and safeguarding team at KPMG Australia.
“In my experience, some incredibly progressive and responsible companies are making enormous efforts to get this right,” says Fiona David GAICD architect of the Global Slavery Index.
“It’s hard to do and it costs money, and they are being let down by legislation that lets other people do little but submit a report. There’s a very strong business case to be made for levelling the playing field by requiring all large businesses to do human rights due diligence, then to set up proper grievance and remediation mechanisms for when problems are found.”
Freya Dinshaw, associate legal director at the Human Rights Law Centre, believes Australian companies need to establish the risks.
“If we are serious about tackling forced labour, companies need to be identifying the risks of harm to people throughout their supply chains, listening to workers and doing everything they can to protect people from high-risk, exploitative practices,” she says.
As David points out, some companies are starting to follow that path. “A few are on to their third or fourth report,” she says. “We can see a significant increase in the maturity of their efforts. Among our largest companies, Woolworths has reported remediating its first case of modern slavery involving 230 workers in Malaysia, and Wesfarmers has also given examples of having remediated cases in its 2024 modern slavery statement.”
However, these are two of only a handful of companies that have disclosed actual cases of modern slavery — or identified indicators such as restricted freedom, working excessive hours, debt bondage, coercion or threats.
“In my view, that number is too low given what we know about the prevalence of the risk, especially in the Asia Pacific, where many Australian companies source products,” says Evans.
Where to start
David suspects some directors who are keen to take action aren’t sure of the best place to start. “I would advise them to take the process step by step,” she says. “Ask your executives what due diligence they have done to identify where the risks lie, and how they are tackling the most severe and significant [of them].”
Companies committed to meaningful change must examine their purchasing practices and start embedding responsible sourcing in a way that supports workers’ rights.
“Practically, this might mean avoiding tight turnaround times or pushing suppliers for lowest prices, ensuring that workers in the supply chain are paid a living wage, no-one pays for a job and workers are able to organise and bargain collectively,” says Dinshaw.
Some companies are swamped by the data they’ve collected since the Act came into force. “They have done the right thing by asking their suppliers many, many questions so they can assess the level of risk that they present,” says Brodie. “Now they need to take the next step by putting the data to use and taking action based on what they find.”
A clear picture of the crimes
When directors are considering processes, strategies and compliance, it can be easy to lose track of what they’re actually trying to achieve.
“It helps to keep a clear picture in your mind of the people we’re talking about and what their daily lives are like,” says David.
“If an executive tells you something that sounds positive — that they’ve set up a grievance hotline, for instance — ask some questions. How many calls has it received? If the answer is zero, ask what makes them confident the hotline is accessible to the target group. If it’s set up in English in Australia, will it be accessible to the cleaners who may not speak English, or the people who are digging up rare earth minerals in Myanmar or sewing T-shirts in Bangladesh?”
There can also be something of a disconnect between the reality of modern slavery and some of the terminology we use. “That’s why I tend to use language like criminal exploitation, human trafficking or forced labour,” says David.
“We’re talking about people who are controlled and exploited for someone else’s profit. If we strip it back to those basics, it’s clear that doing your homework, checking for risks and then putting systems in place to mitigate risk isn’t a lot to ask.”
Meeting international requirements
Brodie has found that most leading businesses would welcome changes to bring greater clarity to the legislation. Most Australian multinationals are also enthusiastic to more closely align themselves with stronger international reporting requirements.
“Since the Modern Slavery Act was implemented, there have been significant advances elsewhere in terms of related human rights and social sustainability legislation, reporting requirements and identification of risks,” she says.
Dinshaw points out that the new European human rights due diligence regime requires companies to prevent harm and holds them accountable where they fail to do so. And, in the US, goods made with forced labour could be banned at the border until suppliers prove working conditions have substantially improved.
“Australia risks becoming a dumping ground for goods made with forced labour if we cannot move past corporate reporting as our sole response to modern slavery,” she says.
Corporate risk
Organisations failing to tackle modern slavery risk more than damage to their reputation.
“Boards need to understand labour exploitation weakens the supply chain,” says Brodie. “There’s also a clear indication people are more likely to choose to work for — and stay longer with — a company that operates in a sustainable and ethical way.”
David has found those who manage their supply chains most effectively base their relationships with suppliers on shared values. “They’re also integrating their anti-slavery work into their corporate culture,” she says.
In some organisations, systemic violations have become business as usual. Brodie is particularly interested in transformative human rights change processes — how these organisations can drive the change required to shift something so embedded.
“The director community in Australia has extraordinary influence and I get excited by the idea it has a platform for shaping how the country does business,” she says.
“The process of transformation will be driven partly by regulation, partly by business risk and partly by the sense of responsibility directors have for the position they hold.”
AICD submission
On 22 January, the AICD provided a submission to the Senate Legal and Constitutional Affairs Committee on the Modern Slavery Amendment (Australian Anti-Slavery Commissioner) Bill 2023. The submission emphasises the critical role an independent Anti-Slavery Commissioner could play in enhancing the effectiveness of the Modern Slavery Act, proposing initiatives such as developing codes of practice, publishing annual risk lists and providing sector-specific guidance to help entities meet their compliance obligations and address modern slavery risks in supply chains.
The AICD strongly supported the establishment of an independent Anti-Slavery Commissioner and its proposed functions outlined in the Bill, with a clearly defined focus on education, awareness raising and coordination.
The AICD’s submission recommends the remit and functions of the Anti-Slavery Commissioner include:
Developing codes of practice and certification measures for suppliers to reduce duplicative supplier due diligence and verification processes within sectors, and provide greater certainty and assurance for entities on compliance within supply chains.
Publishing an annual list of high-risk regions, locations, industries, products, suppliers or supply chains as a reference point for entities in undertaking due diligence activities.
Developing practical guidance for high-risk sectors, NFPs, Aboriginal and Torres Strait Islander organisations and small and medium enterprises (SMEs), including by promoting best practice and drawing on successful domestic and international examples.
Conducting thematic or sectoral assessments of modern slavery statements to provide real-word insights into current practices and highlight areas of due diligence and reporting that require improvement.
Facilitating collaboration across industry, government and civil society to alleviate geopolitical and other barriers to robust supply chain analysis.
Slave labour
The Australian Institute of Health and Welfare lists the following statistics:
- 27.6 million people are in forced labour worldwide, primarily in manufacturing, construction, agriculture and domestic work sectors
- 380 modern slavery reports were received by the Australian Federal Police in 2023–24, mostly for human trafficking
- 69 of those reports were for forced labour
- 21 of those reports were for domestic servitude
How to eliminate modern slavery from your supply network
“Australia risks becoming a dumping ground for goods made with forced labour if we cannot move past corporate reporting as our sole response to modern slavery.”
Fiona David believes the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry helped to bring modern slavery into sharper focus for directors.
“The Royal Commission made it very clear company directors are responsible for people who are impacted by the business,” she says. “It was also a fantastic example of what happens when reputation is damaged by mistreatment of vulnerable people — and victims of modern slavery are some of the most vulnerable people on the planet. Many company directors agree, more than reputation, that this is an issue that ties into building a business for the future rather than just short-term profit.”
David also offers three pieces of advice to directors and executives unclear on the best actions to take to eliminate modern slavery from their supply chain.
“The first is to mandate that everyone you do business with receives a living wage,” she says. “A living wage means being able to afford basics such as having a roof over your head, feeding your family and buying medicine. This is different from a minimum wage because, in some countries, the mandated minimum wage isn’t enough to live on.
“The second is to require your executives to look for and find where the most significant risks of modern slavery occur in your business. Once you have this information, you can put systems and processes in place to respond. The third is to put values before compliance. Of course, we need rules, procedures and regulations, but compliance is the lowest bar. It gives you lots of room to do better.”
This article first appeared under the headline ‘Shifting Sands’ in the March 2025 issue of Company Director magazine.
Latest news
Already a member?
Login to view this content