Corporate counsel must increasingly assess the implications of new transparency statutes that require companies to make public disclosures as to their efforts to address certain human rights-related risks in connection with their business operations, including their supply chains.
Companies are also increasingly aware that their companies may be directly or indirectly linked to acts of human trafficking. Forced labor has been identified in a wide range of industries, ranging from agriculture to electronics manufacturing. As one company recently observed,”even with the best endeavours, no company can confidently say that they do not have modern slavery or other serious human rights abuses in their domestic or global supply chains.”
In this context, companies should be aware of the Government of Australia’s inquiry into whether to enact a Modern Slavery Act, comparable to the U.K. Modern Slavery Act. The inquiry was launched in February 2017 and is being run by the Joint Standing Committee on Foreign Affairs, Defence, and Trade of the Parliament of Australia.
Australia’s inquiry reflects broader trends in the law as legislators across the globe work to identify the most effective ways by which to improve corporate human rights performance. The transparency requirements of the the U.K. Modern Slavery Act, enacted in 2015, are modeled after the California Transparency in Supply Chains Act, which was signed into law in 2010. Just as the United Kingdom looked to California for a model, Australia is now looking to the United Kingdom.
Notably, Kevin Hyland, the U.K. Independent Anti-Slavery Commissioner, was asked to testify as the Joint Standing Committee’s first public hearing on May 30. A copy of his testimony, which includes discussion of the intent behind the transparency requirements, is available here. Subsequent hearings were held on June 22 and June 23. Written submissions have been received from both domestic and international organizations and are available here for review.
In reviewing the submissions that have been made to the Joint Standing Committee, it is clear that the business community is hoping that the transparency provisions of any new Australian legislation will include:
- Clear reporting requirements indicting the types of information that should be disclosed and the level of detail that should be reflected in corporate statements;
- Appropriate consideration for, and alignment with, existing reporting requirements;
- Definitive guidance as to which companies are required to comply; and
- Clarity as to potential penalties for non-compliance.
This input reflects concerns both on the part of business and other stakeholders, including investors and civil society organizations, regarding the highly variable quality and content of the disclosures that have been made to date pursuant to both the U.K. and the California statutes. It is certainly the hope of all interested parties that any new legislation will be aligned with existing requirements and will not create overly burdensome and duplicative reporting obligations.
It remains to be seen whether, and how quickly, Australia will move forward in enacting new modern slavery legislation. We will continue to follow developments and will provide updates as they occur.