This report is a follow up to our earlier report, Paper Promises? Evaluating the early impact of Australia’s Modern Slavery Act. It evaluates the extent to which the Modern Slavery Act 2018 (Cth) (MSA) is driving effective action by companies to address modern slavery, three years into the Act’s operation.

Our first report analysed the ‘first round’ of statements made under the MSA 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, we 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.

In Paper Promises, we wrote:

An analysis of the second round of company reporting is already underway… and it remains to be seen whether companies ultimately lift their game over time. So far, however, it seems that many company statements remain mere ‘paper promises’, with little evidence of effective action in the areas most likely to improve conditions for workers.

Unfortunately, one year on, this assessment still stands. While our analysis of second round statements reveals some improvement in the quality of reporting, this is generally limited to ‘paper-based’ responses (such as establishing policies and supplier codes of conduct, and conducting staff training). Meanwhile, there is glacial progress in the areas that are most likely to address risks to workers trapped in modern slavery.

Over half of the company statements we assessed still do not meet basic mandatory reporting requirements, with just a third evidencing some form of effective action to tackle modern slavery risks. Despite commitments to improvement, over half of the ‘promises’ to carry out future actions set out in first round modern slavery statements remain unfulfilled in the second year of reporting.

Summary of key findings

Companies are not fulfilling their promises

56% of commitments made by companies in their first round statements to improve their modern slavery responses remained unfulfilled in the second round of reporting.

Companies are still failing to comply with the mandatory reporting requirements of the MSA

66% of companies did not address all of the mandatory reporting requirements prescribed by the Act. While this was a modest improvement from the first year of corporate reporting (in which 77% failed to address all of the mandatory criteria), compliance rates remain extremely poor with most companies continuing to miss the mark.

Of the 102 companies reviewed as part of our analysis of the first round of reporting, 10 statements were ‘unavailable’ on the public modern slavery register. It is likely that up to 7 companies failed to submit reports in accordance with legislative requirements.

The average company improved its score by just 7% between first and second rounds of reporting, with some companies substantially recycling or ‘rolling over’ first round statements without any qualitative improvement.

Companies are still failing to demonstrate effective action to address risks

Nearly one in two companies reviewed (43%) are still failing to identify obvious modern slavery risks in their supply chain, despite these being clearly identified in our previous report, extensive public reporting, exposés and inquiries.

• Three in four companies sourcing garments from China still fail to mention the risk of Uyghur forced labour in their statements.
• One in two healthcare companies sourcing personal protective equipment (PPE) from Malaysia still fail to identify this as a sector with high risks of modern slavery.
• One in two food companies still fail to identify sourcing horticultural produce in Australia as high-risk for modern slavery practices.
• Two in five companies sourcing seafood from Thailand still fail to identify this as a high-risk product in their supply chain.

Just a third of companies reviewed (33%) could demonstrate some form of effective action to address modern slavery risks, improve working conditions in their supply chains, or tackle root causes.

Only a handful of leading companies (9%) demonstrated more meaningful engagement on addressing modern slavery risks as well as improvements over time.

Where to next?

Promises that exist only on paper will ultimately lead to broken promises. In a world where it is estimated that more people are facing conditions of modern slavery than ever before,1 there has never been a more crucial time to ensure that Australia’s modern slavery laws are working effectively.

At the time of writing, the MSA is being reviewed to assess its operation since its enactment three years ago, and look at options for improving it. This is a key opportunity to strengthen the law and shift corporate responses from policy to practice, and from paper to people.

As our research on the first two rounds of corporate reporting demonstrate, the MSA is currently failing to drive the changes in corporate behaviour needed to address modern slavery. Compliance with the legislation remains poor and too many companies are continuing to treat the reporting regime as a tick-box exercise.

In order to be effective, the MSA must evolve from prompting a paper-driven response, to a people-driven response to tackling modern slavery. It is simply not good enough for companies to continue to submit reports that lack key required information, fail to identify obvious risks or make vague promises that are never fulfilled.

‘Mandatory reporting’ under the law must be made truly mandatory, through increased independent oversight and enforcement. The Labor government’s proposal to introduce penalties and an independent Anti-Slavery Commissioner are a welcome start towards addressing some of the legislation’s current failings.

More fundamentally, however, the MSA should be amended to require companies to take action to address modern slavery, not just to report on their current practices. The law should require companies to undertake human rights due diligence to identify and address modern slavery risks in their operations and supply chains and hold them accountable if they fail to do so.

The workers who make the clothes we wear, the food we eat, and the PPE that keeps us safe, have the right to expect that our laws will deliver more than mere ‘paper promises’ to end modern slavery. And businesses that are investing in real changes to improve workers’ rights and safety should be able to expect a level playing field.

Read or download full report here.