Proposed Legislation Targets Modern Slavery in Supply Chains
Electronics, garments and solar panels are all billion-dollar imports for Australia.
They are also products made at risk of modern slavery.
Every year, Australia imports over twenty-four billion Australian dollars’ worth of products that are at risk of being made using forced labour. Forced labour falls under modern slavery, alongside other slavery offences like human trafficking, child exploitation and forced marriage.
Whilst Australia has relatively comprehensive legislation to criminalise these offences, there is still significant exposure to modern slavery through global supply chains. As a result, business supply chains are at the centre of the recently announced legislative overhaul to combat modern slavery.
Proposed Overhaul
Present legislative frameworks that attempt to hold businesses accountable for their supply chains have existed for years. At the beginning of 2019, the Modern Slavery Act 2018 came into force. It required organisations with an annual consolidated revenue of at least 100 million dollars to prepare annual modern slavery statements detailing the risks in their supply chains and how these were to be addressed.
During its operation, the framework has faced criticism.
In 2022, an independent audit by the UNSW Human Rights Institute revealed that companies had very limited understanding of their own supply chains. The audit found that four in five companies could not adequately explain their workforce composition and the average quality of disclosure was sixteen per cent. Most companies did not take responsibility for remediation, nor did they express a commitment to paying their supply chain workers a living wage.
This audit, along with other independent and government reviews, made a number of key recommendations that were not implemented.
However, the Attorney-General’s recent announcement changes this.
Foremost, a new criminal offence is to be established for companies that fail to prevent modern slavery in their supply chains. Alongside civil penalties and associated enforcement powers for non-compliance with the current Act, the offence would aim to hold companies with an annual consolidated revenue over 100 million dollars adequately accountable. A defence would be available for these businesses if they can demonstrate they took reasonable steps to prevent modern slavery.
In a media release, Attorney-General Michelle Rowland stated that:
Changes on the International Stage
Australia’s reforms follow a series of changes relating to modern slavery internationally.
From December 2027, the European Union’s Forced Labour Regulation will fully apply. This regulation will ban the import, export, or placing on the EU market of products made with forced labour. It is the final stage of the three-year transition period, which commenced at the end of 2024.
The United Kingdom has also recently announced amendments to its legislation, similar to that proposed by the Attorney-General. The amendments include mandatory supply chain due diligence disclosures, with maximum financial penalties being the greater of one million pounds or one per cent of the organisation’s total turnover or budget.
The changes by the Albanese Government have been proposed only weeks after Australia was included by the President of the United States, Donald Trump, as ‘one of the fifty-four economies that had failed to do enough to stop imports made with forced labour’, proposing a 12.5 per cent tariff on affected goods. There is nothing to suggest the Albanese Government’s reforms came because of the threat; however, Anti-Slavery Commissioner Chris Evans said at the time that despite the Australian government not doing enough, he did not believe the Trump administration was motivated by a genuine concern about workers’ rights.
Nevertheless, the reforms may reduce the proposed tariff to be imposed by the United States.
Progress in Sight
Foremost, the changes establish a clear obligation on companies to prevent and act on modern slavery in their supply chains. Reports have shown that within global supply chains, there is ‘widespread evidence of children being employed in subcontracted settings’. Other research suggests that 138 million children were involved in child labour globally in 2024, and that two in five children in labour perform hazardous work.
Young people and children remain more vulnerable to modern slavery, as they are economically and socially vulnerable, with limited capacity for informed consent, and are often affected disproportionately by power imbalances.
As the reforms enter formal consultation, experts hope the final product will be ‘workable, enforceable and matched with sufficient resourcing’. Grace Forrest, Founding Director of Walk Free, a human rights organisation, believes that:
Some business groups have criticised the plan, suggesting that a “new offence doesn’t help end modern slavery” and that the new system will add “mountains of paperwork”.
However, given there are an estimated fifty million people living in modern slavery globally, a number which has increased by ten million people since 2016, most anti-slavery organisations applaud the change.
