'A Tiger Without Teeth'? the Forthcoming Review of the Modern Slavery Act 2018 (Cth) and the Place of 'Traditional' Penalties
(2021) 38 Company & Securities Law Journal 1-27.
43 Pages Posted: 15 Apr 2021
Date Written: March 1, 2021
In 2018 the Australian Parliament passed the Modern Slavery Act 2018 (Cth) (MSA), following the introduction of similar legislation in the United Kingdom and California. The MSA imposes modern slavery reporting requirements on lead firms in supply chains. The MSA relies on a reputation and market forces compliance mechanism to encourage companies to comply with the reporting requirements and to address modern slavery in their supply chains, rather than a more traditional regulatory model. This paper assesses the MSA’s compliance mechanism and argues that while it may have been a necessary starting point for Australia’s modern slavery regulatory regime, the limitations of the current approach are significant. New evidence from the UK Act’s operation suggests it is unlikely that the MSA’s design will be effective in requiring companies to comply with reporting requirements. This paper argues this will be the case even when incidental enforcement mechanisms of directors’ duties and misleading and deceptive conduct are taken into account. This analysis is consistent with regulatory theory perspectives that suggest the MSA’s compliance mechanism is insufficient and requires supplementation. In offering suggestions for reform to the MSA, this paper draws on alternative modern slavery regulatory models and contributes to the debate that will surround the forthcoming mandatory review of the MSA’s operation.
Keywords: modern slavery, penalties, corporate regulation
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