The concept of Modern Slavery is a relatively broad term that refers to situations where a person cannot refuse to work (or leave work) due to threats of violence, deception or coercion.

This concept has formed the basis of new laws introduced in countries like Britain with the express purpose of discouraging the exploitation of labour by making it difficult for businesses in developed economies to sell products (and/or services) that have been brought to market using ‘slave labour’.

Late last year, Australia joined this international movement via the passing of the Modern Slavery Act (2018). For the purposes of the Act, Modern Slavery will seek to minimise the risk of goods and service sold in Australia being derived through criminal activities such as the use of child labour, forced labour, human trafficking, slavery like practices, deceptive recruiting of labour.

A recent article produced by legal firm Norton Rose Fulbright (See http://www.nortonrosefulbright.com/knowledge/publications/155473/modern-slavery-act-what-businesses-in-australia-need-to-know) cited statistics from the 2018 Global Slavery Index suggesting that:

  • in excess of 40 million people globally are subject to some form of modern slavery and collectively approximately US$150 billion per year is generated in the global private economy from forced labour alone;
  • 24,990,000 people in the Asia-Pacific Region are ‘enslaved’ (62 per cent of all people enslaved); and
  • 15,000 people in Australia are ‘enslaved’.

While the laws don’t carry any penalties for participating in such activities (as they are already outlined in the Australian Criminal Code), the principal objective of the new laws are to encourage Australian businesses to report publicly on the steps that they are taking to reduce the risk of modern slavery – both within their own business (including any wholly owned subsidiaries) and within their supply chains.

“The new laws impose reporting obligations on a significant number of fuel businesses in Australia given the $100M threshold, including large/medium fuel retailers as well as medium fuel distribution businesses”, said ACAPMA CEO Mark McKenzie

The new laws took effect on 1 January 2019 and will likely result in affected businesses being required to lodge their first annual report for the 2019/2020 financial year (Australian subsidiary businesses that operate on other financial years will be required to report on the first ‘whole’ financial year that falls after 1 January 2019).

In effect this means that all affected businesses should start to review their own operations and their supply chains to ensure that all reasonable steps are being taken to minimise the risk of human slavery.

The extension of the laws to the supply chains of large entities, therefore means that larger businesses will need to review the operations of all smaller businesses in their supply chains (e.g. fuel distribution and fuel retail businesses) to ensure that they too are making all reasonable efforts to minimise human slavery risks.

“In short, these new laws will impact businesses of all sizes in our industry – either as a result of being a large business that is required to report publicly, or as a result of being a supplier to such a business”, said Mark.

While most of the “human slavery” activities identified in the Act might reasonably be considered rare in Australian society, the obligation extends to suppliers of goods and services operating in other international economies where the risk of such activities is typically higher.

One area that could well be relevant in the context of the Australian business environment is the definition of ‘deceptive recruiting of labour’.

These laws complement existing Australian employment laws and the Vulnerable Workers Bill (2017), requiring all businesses to ensure that their employment documentation satisfies all Australian employment laws.

“Rightly, no one has argued against the intent of these laws but there are questions about the scope reporting and the interpretation of what constitutes ‘reasonable efforts’ to minimise the risk of human slavery activities”, said Mark.

ACAPMA has started to discussions with the Australian Government to seek clarity on these issues.

“We fully intend to use this information to develop a service that supports our members in meeting their reporting obligations under the Act – either as a large business that is required to report directly or as a business that forms part of the supply chain of a large business”, said Mark.

“More information will be provided to members as it comes to hand, but it is time for businesses to start thinking about how these new laws will affect them and how they will review modern slavery risks within their operations”, concluded Mark

In the meantime, further information about these laws can be obtained by contacting ACAPMA’s Employment and IR team on 1300 160 270 or by sending an email to communications@acapma.com.au