Coalition of investors and unions calls for mandatory due diligence to address supply chain risks
A coalition of more than 100 investors, businesses, unions and advocacy groups has launched a push for the federal government to strengthen Australia’s modern slavery laws, warning that the current regime is failing to improve conditions for workers and leaving the country behind international standards.
In a letter to Attorney-General Michelle Rowland, the alliance of 105 signatories called on the government to introduce mandatory due diligence requirements for large companies operating in Australia, shifting the law from disclosure to obligations to identify and address forced labor risks in supply chains.
The intervention comes three years after an independent review of Australia’s Modern Slavery Act found the law “has yet to lead to meaningful change” for people affected and recommended sweeping reforms.
The review, led by Professor John McMillan, made 30 recommendations, including the introduction of mandatory due diligence obligations for companies. Although the Albanian government has accepted 25 recommendations in principle by late 2024, none have yet become law.
Responsible Investment Association Australasia co-chair Estelle Parker said investors were increasingly viewing labor exploitation as a financial risk rather than a purely ethical issue.
“Exploitation is not a sustainable business model and investors are pricing in that risk,” Parker said.
“A business model that relies on underpaid workers, weak regulations, or illegal activities such as modern slavery [be unlikely to] Generate sustainable profits.”
Modeling from Fair Supply, a supply chain risk intelligence platform, estimates that more than 21 per cent of all goods brought into the country in the last financial year – around $1 in every $5 spent on imports – were linked to supply chains where coercion, debt bondage and other forms of modern slavery are known to occur.
Campaigners say the current framework, introduced in 2018, relies heavily on reporting requirements and lacks mechanisms to force companies to prevent abuse. Signatories include investors representing more than $400 trillion in funds under management, eight national and state associations, and more than 30 nonprofits from five continents.
Australian Council of Trade Unions chief executive Michele O’Neil said the government must take action to implement the recommendations, adding that stronger laws would create a level playing field by ensuring businesses that address exploitation risks are not disadvantaged against rivals that do less.
“No worker should be forced into dangerous, exploitative work that puts their health and safety at risk,” O’Neil said.
According to figures cited by the coalition, there are an estimated 50 million people living in modern slavery and forced labor worldwide, including around 41,000 in Australia. The groups say stronger laws are needed to ensure companies take action when risks are detected, rather than merely disclosing them in annual filings.
Earlier this year, Anti-Slavery Commissioner Chris Evans called for stronger legislation at a time of increasing international scrutiny over Australia’s approach to imports linked to forced labour.
The United States has criticized Australia’s failure to ban imports produced using forced labor, while the European Union has moved to impose mandatory human rights and environmental due diligence obligations on large businesses as part of its trade framework.
Moe Turaga of Domus 8.7, an affiliate of the Catholic Archdiocese of Sydney, said survivors expected Australia’s modern slavery laws to lead to stronger change.
“People like me who had experienced modern slavery had high hopes,” Turaga said. “I’m disappointed that we still haven’t seen any meaningful change in the conditions of the people most at risk.”
Grace Forrest, co-founder and founding director of Walk Free, a human rights group focused on eradicating modern slavery, said Australian laws needed to go beyond transparency requirements.
“There is global momentum to move beyond transparency to accountability,” Forrest said.
Freya Dinshaw, deputy legal director at the Human Rights Law Centre, said support for reform spread across sectors.
“From boardrooms to factory floors, there is clear support for reforming Australia’s modern slavery laws,” Dinshaw said.
Business groups have signaled concerns that reporting obligations risk diverting attention from practical initiatives that more effectively address the modern slavery risks faced.
Rob Harris is a national correspondent for The Sydney Morning Herald and The Age, based in Canberra. He is a former European correspondent.Connect via email.
