Regulating Transparency and Disclosures on Modern Slavery in Global Supply Chains: A 'Conversation Starter' or a 'Tick-box excercises?

The global economy relies on corporate sourcing and procurement practices along complex transnational supply chains. Some goods and services that find their way to the consumer public are sourced in contexts tainted by modern slavery, including forced labour and human trafficking. Mandatory reporting and disclosure schemes have long been used to manage risk and impact across various aspects of corporate and market activity. It is only more recently that some governments have begun to use such mechanisms in the context of human rights, including specifically to address modern slavery risks in supply chains. Based on experiences in other countries, Australia’s Modern Slavery Act (2018) (Cth) is the most recent example of an emerging global regulatory initiative of using domestic legislative models to increase transparency and associated stakeholder engagement to address modern slavery risks in supply chains.

Evolving mandatory disclosure mechanisms in this context carry some promise in terms of addressing the most serious socially negative ‘externalities’ of global manufacturing supply chains, as well as narrowing the perennial national-level implementation gap in international human rights law. Such mechanisms have important implications for business and for the legal, accounting and assurance professions, which may be familiar with reporting requirements, but not in a human rights context. Yet more empirical research is needed, both on the assumptions underlying mandatory human rights reporting schemes and their intended purpose, as well as the drivers and patterns of corporate responses to such mechanisms. This report outlines the premises and principal findings of cross-disciplinary research – combining reviews of relevant documents with interviews and surveys of corporate and other actors – into how mandatory corporate reporting schemes such as Australia’s might help to address the risk of modern slavery in business supply chains.
While many Australian firms, industry bodies and advocacy groups have engaged in public and on-record debate about the design of the Australian Modern Slavery Act, not enough is yet known about how firms (and others) are preparing to respond to this, nor how government and stakeholder groups (such as investors, customers, civil society groups) might engage with firms in awareness and transparency building exercises. Nor have scholars yet comprehensively unpacked some of the theoretical and conceptual assumptions upon which this debate has proceeded. This project offers – here through this briefing paper – an empirically-informed analysis of the existing and emerging issues, perceptions and concerns around the new Australian Act, studied in the context of the UK’s experience (and lessons from other schemes).