The Modern Slavery Act, which entered into force on Jan. 1, 2019, established a modern slavery reporting requirement for large businesses and entities with annual consolidated revenue of at least $100 million (US$71 million).
Two years since it was implemented, almost 4,000 statements have been published, and the investigative report by a coalition of human rights organisations, church groups, and academics examined submissions by 102 companies.
“The Modern Slavery Act was meant to drive a ‘race to the top’ by business to address modern slavery in global supply chains, but our research indicates most companies have barely left the starting blocks,” report co-author Freya Dinshaw said.
Instead of focusing on the largest market listed on the stock market, the authors examined companies in four sectors with known risks of modern slavery: garments from China, rubber gloves from Malaysia, seafood from Thailand, and fresh produce from Australia.
They found that most companies showed “superficial and incomplete compliance” with reporting requirements.
“It is increasingly apparent that reporting alone is not going to be enough to drive fundamental change,” Dinshaw said. “If the Government is serious about eliminating modern slavery, it must strengthen the Modern Slavery Act to make it enforceable and require companies to take action.”
On average, submissions addressed 59 percent of the mandatory criteria, with less than one in four companies completely addressing the requirements.
More than half of the reviewed companies were failing to identify prominent risks in their operations and supply chains while sourcing from sectors that have been constantly identified as having systematic exploitation.
For example, three-in-four garment companies that sourced from China failed to mention the risk of Uyghur forced labour. In addition, more than half of healthcare companies sourcing gloves from Malaysia failed to identify forced labour risks in their industry.
Further, less than one-third of companies reviewed demonstrated that they were taking action against these risks.
Additionally, just one in four companies reported that they complete human rights due diligence for new suppliers at the selection stage, and 14 percent expressed commitment to ensuring workers in their supply chain were paid a living wage.
However, some small clusters of companies appeared to be rigorous and detailed in their reporting approach, and business size was not a determining factor.
“The small clusters of leading companies who are showing what is possible should be commended for their efforts,” report co-author Amy Sinclair said. “Looking forwards, those that are lagging should be forced to act to eliminate modern slavery from the goods we use every day.”
The authors made several recommendations to the federal government to address this issue. These include banning imported goods made from modern slavery, developing additional guidance for companies operating in high-risk sectors, and giving priority in the public procurement process to companies that address modern slavery as a reward.
