UNSW UNSW Business School UNSW Business School

Can legislation curb the scourge of modern slavery?

June 20, 2018
Social impact
  There are fears the new Act may be mostly window dressing

​Large organisations operating within Australia will soon be required to report annually on the steps they are taking to eliminate slavery from their supply chains both within Australia and overseas.

But there are fears the federal government's forthcoming Modern Slavery Act will do little to combat the scourge of forced labour.

Stephen Frenkel, a professor of organisation and employment relations at UNSW Business School, says that while the Act may be well-intentioned, it could end up as merely "window dressing" for a problem affecting 45 million people around the world – half of them in the Asia Pacific region.

According to the International Labour Organisation, modern slavery is exploitation that a person cannot refuse or leave because of threats, violence, coercion, deception, and/or abuse of power.

In Australia, around 4500 people are believed to be existing in these conditions, which includes forced labour, forced marriage and people trafficking.

Modern slavery also refers to people who work in dangerous conditions, without a living wage, who lack job security, have unsustainable work intensity, or are denied the right to join a union or bargain collectively.

Local examples that have come to public attention include domestic workers in servitude in embassies in Canberra, trafficked sex workers in brothels, young people on 417 visas as farm workers being threatened or sexually exploited, and the underpayment and exploitation of foreign workers on 457 visas.

Internationally, cases include forced labour in garment factories throughout the Asia-Pacific region, child labour in palm oil production, and abuse of migrant workers in the fishing industry in Southeast Asia.

No penalties for non-compliance

Australia's Modern Slavery Act is due to be introduced this year and only applies to large private organisations with a turnover of more than $100 million. This is expected to affect more than 3000 businesses, and federal government procurement.

An anti-slavery unit will be set up within the Department of Home Affairs to manage the
 implementation of the reporting requirement.

But there will be no penalties for non-compliance. There is also no provision for an independent anti-slavery commissioner, an office recommended by the Senate's 'Hidden in Plain Sight' report.

This falls short of a state Modern Slavery Bill, which was introduced by cross-bench MP Paul Green into the upper house of the NSW parliament last month. It proposes mandatory reporting from companies operating in NSW with a turnover of more than $50 million – with penalties for non-compliance and the appointment of an anti-slavery commissioner. Under Green's legislation, the NSW Auditor-General would undertake risk assessments to the supply chains of government agencies.

But as for the forthcoming federal legislation, Frenkel doubts its effectiveness, saying it is unclear how it will improve the situation locally, or overseas.

"I suspect the Modern Slavery Act is not much more than window dressing," he says. "You have to ask just why are they doing it?"

Frenkel points out that, in Australia, workers are already covered by Fair Work legislation and this should be enforced. And exploitation in global supply chains requires as a first step that relevant organisations show they are using due diligence processes to effectively implement the UN's Guiding Principles of Human Rights to which Australia is a signatory.

An international treaty would be the ultimate objective.

'This is an alternative – an industry approach by the largest employers aimed at setting a minimum living wage'


A minimum floor

Frenkel has been studying how advanced countries can help improve working conditions in developing nations. He says the large manufacturers in those countries are already well aware of supply chain risks involving the use of modern slavery – even if they are not effective in dealing with the issue.

Ultimately, an effective solution would involve the advanced countries having an international treaty or convention with developing nations on the "living wage" and labour standards, he adds.

"Then, there would be a minimum floor internationally, across all industries, to which everybody is agreed.

"That agreement should include public transparency requirements so that consumers are aware of what different organisations are doing. There should also be opportunities for workers to report when the minimum standards are not adhered to. This means recourse to a complaints and remediation procedure," says Frenkel.

Meanwhile, 17 international brands are voluntarily taking the initiative to improve the working conditions of people in their supply chains. ACT (Action, Collaboration and Transformation) is a program run by clothing brands, manufacturers, retailers and unions to provide a living wage to workers.

Brands involved in ACT include ASOS, H&M, Inditex, Topshop, Target and Kmart.

"This is an alternative – an industry approach by the largest employers aimed at setting a minimum living wage," says Frenkel.

While there are fears that raising wages would also increase costs and lead to unemployment in vulnerable communities, Frenkel says it is possible to offset higher wages, for instance, with productivity gains through continuous improvement and higher volume of exports.

His research, with colleagues, on the garment industry in Bangladesh shows that manufacturers have been able to maintain labour standards and improve safety despite declining prices. 

"But it requires effort, not only on the wages front, but also on the productivity front," Frenkel says. This would require the co-operation of governments and employers in advanced and developing countries.

'[Legislation] does raise the awareness and makes people think more about who they are encountering when they go into places like nail bars'


A high bar

Charlotte Smedley, a lecturer in the school of social sciences, Centre for Refugee Research, at UNSW, has a more optimistic view of Australia's new anti-slavery legislation. She believes the federal Act will concentrate attention and increase understanding of the issue.

Smedley notes that most of the prosecutions in Australia so far have been about human trafficking of 'sex slaves' and the Act may encourage more action in other areas of concern.

After the UK introduced its Modern Slavery Act in 2015, trafficking prosecutions rose more than 60% to 295, and the number of people referred to the government's national mechanism rose 47% between July and September 2017, compared with the same period in 2016.

"[Legislation] does raise the awareness and makes people think more about who they are encountering when they go into places like nail bars," Smedley says.

There have been cases in Britain of children being trafficked from Vietnam to work in nail bars.

Smedley says many of her students are surprised to learn about the working conditions of the people who make their clothes, produce their coffee and manufacture their mobile phones.

"I want my students, the next time they change their phone or laptop, to think about who has dug out the precious metals to make it and what sort of conditions they have been in. Are the workers children or adults? Is it about modern conflict?"

But Smedley does have some concerns about the forthcoming federal legislation saying that it "sets the bar pretty high" by only requiring very large organisations to report on their efforts to eliminate modern slavery from their supply chains.

"[In Australia] it tends to be much smaller areas that are slipping under the radar – people who come over on 457 visas working in construction or agriculture, or the backpackers coming on the 417 visa who are working with labour hire companies in farm work or processing work," she says.

The legislation will not help domestic workers, migrant brides who have their passports taken away, or women working in nail bars who have a bond of debt to their employers.

"These [employers] are never going to be reporting," Smedley says.

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