This report is a follow up to an earlier report, released in February 2022. It evaluates the extent to which the Modern Slavery Act 2018 (Cth) is driving effective action by companies to address modern slavery, three years into the Act’s operation.

The first report analysed the ‘first round’ of statements made under the Modern Slavery Act by 102 companies sourcing from four, high-risk sectors: garments from China, gloves from Malaysia, horticulture from Australia and seafood from Thailand. For this report, researchers assessed 92 ‘second round’ statements by these same companies (*rather than 102, since some had not published statements) to assess whether companies had improved their performance over time.

Key findings:

• Companies are not fulfilling their promises.
• Companies are still failing to comply with the mandatory reporting requirements of the Modern Slavery Act.
• Companies are still failing to demonstrate effective action to address risks.

Recommendations:

1. Require reporting entities to undertake due diligence to address modern slavery

Reporting in and of itself is unlikely to result in the transformative changes to corporate practices that are needed to eliminate modern slavery. The MSA should be amended to include a specific duty to prevent modern slavery, which requires companies to undertake human rights due diligence to identify and assess salient risks in their operations and supply chains that give rise to modern slavery and to take steps to mitigate and address them. Companies would have to show reasonable and appropriate due diligence as a defence to legal liability.

2. Make mandatory reporting mandatory by introducing penalties

Many companies are still submitting reports that fail to address even the basic ‘mandatory’ reporting criteria. Companies that fail to report, repeatedly fail to address the mandatory criteria, or disclose information that is false or misleading should face consequences such as financial penalties, being listed on the Modern Slavery Register as a non-compliant entity, and being excluded from public tenders.

3. Provide for appropriate oversight and enforcement of the MSA

Oversight of due diligence and reporting requirements should be undertaken by a well-resourced regulator with appropriate powers of investigation and enforcement. An independent Anti-Slavery Commissioner should be established to oversee the effectiveness of the MSA.

4 Provide for access to justice for exploited workers

The MSA should include a specific cause of action so that workers experiencing modern slavery can seek redress in the event that reporting entities have failed to exercise adequate due diligence to prevent modern slavery in their operations and supply chains. Workers subjected to severe forms of labour exploitation should not have to rely on voluntary remediation processes by businesses to obtain remedy.