Tuesday 2 April 2019

Modern slavery reporting: what it is/not

Some legislative schemes have unforeseen consequences on the upside. They achieve far more than their particular remit, and capture or catalyse a wider shift.

Others generate unreasonable expectations: laws can only do so much, even in developed regulatory states, and especially without the accompaniment of more profound and clear messages from markets and people about the kinds of behavioural and cultural changes they want companies to exhibit.

Australia's Modern Slavery Act came into effect this year. It requires larger firms report annually on whether and what steps they are taking to manage these human rights risks within their operations and supply chains.

Last week the government released draft guidance for reporting entities (here).

In this context I attempt 3 propositions about what this statutory scheme may represent, and 3 things that it doesn't necessarily represent: what is it not?

'What it maybe is'

1. The Act is -- like its UK predecessor and whatever its shortcomings -- a landmark achievement in bringing to corporate boards across Australia a new awareness of the human rights risks sometimes associated with mainstream business and financial activity, and the extent of regulatory intent that exists around these.

2. The Australian Act can be seen as part of a wider pattern, at least in OECD countries, of statutory requirements to undertake human rights due diligence or at least report on such activities -- even if domestic and other regulatory manifestations of the UN Guiding Principles on Business and Human Rights are still very piecemeal.

3. Engagement with the Act by corporations (and their advisory firms) on this particular human rights risk may drive wider awareness and uptake of the fuller 'business and human rights' agenda, but will not necessarily do so.*

'What it perhaps is not'

1. The Act is one corporate reporting mechanism among many for big firms (and modern slavery is only one class of business & human rights issue): as the Act beds down there are no guarantees that this will remain a distinctive high-profile issue ...

2. An external reporting requirement (even one with board-level sign-off) is no guarantee that firms and funds will take and sustain effective internal procedural, operational and cultural changes relevant to preventing and remedying modern slavery risk.

3. Even fulsome corporate compliance with the Act (and internalisation of its purpose) will not necessarily have a discernible or material effect on the prevalence of modern slavery in our region.

That last point is a reminder of the risk of such legislation becoming an Australian regulatory salve for our own consciences (here).

There are many other things one could add about what the Act is not. The Act is not a panacea. The Act is not mere pandering to corporations. The Act is not victim-focused or remedial in nature.

And so on. For one thing, advocates and academics in 'business and human rights' often talk of these corporate reporting models as new. They are not. They are only new to this field, which would benefit from more research couched in lessons about what reporting requirements, and non-penal ones in particular, can and cannot do to drive progress on the underlying issue with which they deal. 

Jo

* In 2018 research with Justine Nolan and M. Azizul Islam (publication forthcoming) we observe that many corporate officers and others see the Act as, at very least, a 'conversation starter' within firms and more widely.

See here for a recent post on compliance risk under the Act, and here for a different take (modern slavery approached in verse...).

No comments:

Post a Comment