Companies are failing to meet the minimum reporting requirements set out in Australia’s Modern Slavery Act, with a staggering 64 percent falling short, according to Walk Free and WikiRate’s global Beyond Compliance project.
The two organisations have been analysing statements under Modern Slavery Acts since 2016, with this year’s update revealing serious gaps in compliance, transparency and action, leading to calls for urgent legislative reform.
However, Australia isn’t alone, with just 20 percent of UK modern slavery statements meeting minimum reporting requirements.
Once seen as global leaders with the introduction of Modern Slavery Acts in 2015 and 2018, respectively, the UK and Australia have had the best part of a decade to show tangible results, but Walk Free and WikiRate say these laws have proven to be “insufficient in addressing the issue.”
Australian companies are said to outperform UK companies on reporting metrics due to stricter legal requirements and clearer government guidance, but a key factor behind the low compliance across both countries is said to be the absence of financial penalties.
“Without legal consequences for non-compliance, many companies treat modern slavery statements as a box-ticking exercise rather than a meaningful commitment to addressing exploitation,” said Walk Free and WikiRate.
Together, the two organisations scrutinised more than 2,000 modern slavery statements from the UK and Australia to create this year’s report, revealing that many companies who do comply are failing to demonstrate a reasonable impact.
Two-fifths (40 percent) of Australian companies are using Key Performance Indicators (KPIs) to assess modern slavery risks, but only six percent include Business Performance Indicators (BPIs) to measure real-world impact.
Other key findings include:
- Just 14 percent of companies report finding cases of modern slavery in their supply chains, despite 50 million people living in modern slavery conditions globally, suggesting either a lack of effective due diligence or an unwillingness to be transparent about findings
- Slightly over a third (34 percent) of companies engage with workers or trade unions
- Just 15 percent address low and underpayment of wages, which is shown to be a key driver of exploitation
- Half of all company disclosures are related to wages and working hours
- Sectors that are most likely to disclose incidents include electronics (28 percent) and garments (25 percent), with hospitality lagging behind (9 percent)
- Just under half of companies (49 percent) provide details on remediation measures
“The UK and Australian Modern Slavery Acts currently focus on corporate transparency rather than legal accountability,” said Walk Free and WikiRate.
“The Australian Government has acknowledged the need for stronger legislation and is holding consultations on the introduction of a due diligence framework.
“However, the UK Government has not yet committed to aligning its laws with international due diligence standards. Momentum is growing for stronger laws, but political inaction risks delaying urgent reforms.”
Walk Free and WikiRate point to the EU’s Corporate Sustainability Due Diligence Directive as an example of meaningful legal reform, due to companies facing legal penalties if they fail to identify, prevent and mitigate human rights abuses across their supply chains.
The organisations say the UK and Australia are now standing at a crossroads and risk being left behind if they fail to develop their modern slavery laws.
“To remain credible leaders in the fight against modern slavery, both countries must transition from transparency-based legislation to enforceable due diligence laws.
“Without decisive action, companies will continue to prioritise optics over meaningful change, and people most at risk of exploitation will continue to pay the price.”
At the end of last year, the Australian Federal Government responded to an independent review of the Modern Slavery Act, which suggested the introduction of penalties and due diligence obligations that mirror the European Union’s new Corporate Sustainability Due Diligence Directive.
The government agreed in full, part or in-principle to 25 of the 30 recommendations from the review that was completed by Professor John McMillan AO, but said it wanted to undertake further consultations on major proposed reforms.
At the time, Walk Free’s Director of Business and Human Rights Serena Grant said some Australian companies had taken commendable steps to address modern slavery, but without strong laws, their competitors can do nothing and remain at a disadvantage.
“Through the statutory review, the government has already run a detailed consultation with business and other stakeholders. It is disappointing that the government has chosen to redo this process when the recommendations for penalties and due diligence systems were already so clear,” she said.
“This is also a missed opportunity to help Australian businesses prepare for the EU’s due diligence requirements, which will come into force in 2027. Instead of leading the way, Australian companies will now be left scrambling to meet international standards.”
According to the Perth-based international human rights group’s Global Slavery Index, 41,000 people are living in modern slavery in Australia, with the nation importing more than AUD $25 billion worth of goods that are at risk of modern slavery annually.
