Doing Business Right Blog

Editor’s note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of European and International Human Rights Law at Leiden University in the Netherlands and a contributor to the Doing Business Right project of the Asser Institute. Prior to commencing the LLM, she worked as a business and human rights solicitor in Australia where she specialised in promoting business respect for human rights through engagement with policy, law and practice.

Soon after the introduction of the UK Modern Slavery Act (UK Act) in 2015, discussions about establishing similar legislation in Australia commenced. In February 2017, the Attorney-General asked the Joint Standing Committee on Foreign Affairs, Defence and Trade (Committee) to commence an inquiry into establishing a Modern Slavery Act in Australia. The terms of reference of the inquiry included, inter alia, considering the ‘prevalence of modern slavery in the domestic and global supply chains of companies, businesses and organisations operating in Australia’ and whether a Modern Slavery Act comparable to the UK Act should be introduced in Australia. The Committee released an interim report in August 2017 and then a final report in December 2017 – both reports supported the idea of developing a Modern Slavery Act in Australia and set out the Committee’s recommendations with respect to the parameters of a corporate reporting requirement. In the meantime, the Australian Government also published a consultation paper and regulation impact statement outlining its proposed reporting requirement for an Australian Modern Slavery Act.

In June this year, the first draft of the Modern Slavery Bill 2018 (Cth) (the Federal Bill) was introduced into the Australian Parliament. It set out a reporting requirement for large Australian entities to submit a statement on risks of modern slavery in their operations and supply chains. The Explanatory Memorandum to the Federal Bill stated that it supports ‘large businesses to identify and address modern slavery risks and to develop and maintain responsible and transparent supply chains. It will drive a ‘race to the top’ as reporting entities compete for market funding and investor and consumer support.’ On 29 November 2018 the Federal Bill passed both houses of the Australian Parliament incorporating amendments made by the Upper House of Parliament. The amendments resulted in the inclusion of a provision giving the Minister power to request explanations from entities that fail to comply with the reporting requirement (discussed in further detail below) and gives the Minister the power to cause an annual report to be prepared providing an overview of compliance by entities and identifying best practice modern slavery reporting.

This second blog of a series of articles dedicated to the global modern slavery developments provides an overview of the main elements of the Federal Bill and how it compares to the UK Act. It also discusses the Modern Slavery Act 2018 (NSW) (NSW Act), which was introduced by New South Wales (NSW), a State in Australia. The introduction of NSW Act was relatively unexpected given the movement at the Federal level to introduce national legislation addressing modern slavery in the corporate context. Therefore, this blog will discuss the NSW Act’s interplay with the Federal Bill. It will be followed by a final piece on the modern slavery developments in other jurisdictions in the corporate context. More...

Editor's note: This report compiles all relevant news, events and materials on transnational business regulation based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

United Nations Treaty Negotiations: Debating a Treaty on business and human rights

The Third Session of the Open-ended Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with Respect to Human Rights ran from 23-27 October 2017 at the United Nations in Geneva. The session saw substantive discussions between State delegates and civil society on the elements of a future Treaty on business and human rights. Topics of debate included extraterritoriality, provisions on the supremacy of human rights over trade and investment agreements, the Treaty’s scope in terms of companies covered, international cooperation, monitoring and implementation mechanisms. The process is set to continue in 2018, with the Chair expected to present a proposal for a draft Treaty ahead of the IV session. Meanwhile, over forty civil society organisations addressed an open letter to States and the EU calling on decision-makers to ensure the continuity of the process. The organisations call on governments and the European Union to explicitly commit to “prepare detailed reactions to the elements for a draft legally binding instrument, in preparation for constructive engagement in the ongoing process towards a draft text and the next negotiation session of the OEIGWG”.

Lungowe v Vedanta: Court of Appeal confirms jurisdiction against English domiciled parent company

On 13 October 2017, the Court of Appeal in London handed down its judgment in Dominic Liswaniso Lungowe and Ors. v Vedanta Resources Plc and Konkola Copper Mines Plc [2017] EWCA Civ 1528. The case is brought by 1,826 villagers from the Chingola region of Zambia against the London Stock Exchange listed metals and mining company Vedanta Resources Plc and its Zambian subsidiary Konkola Copper Mines Plc. The villagers claim personal injury, damage to property and loss of income, amenity and enjoyment of land, due to alleged pollution and environmental damage caused by discharges from the Nchanga copper mine for over a decade. The judgment runs contrary to the historical legal doctrine that English domiciled parent companies are protected from liability for their foreign subsidiaries’ actions. The decision clarifies the duty of care standard a parent company owes when operating via a subsidiary and opens the gates to other English domiciled companies and their subsidiaries potentially being held accountable for any human rights abuses.

Bangladesh Accord Arbitrations: Decision on Admissibility of Claims and Confidentiality

On 16 October 2017, the Permanent Court of Arbitration issued a press release on behalf of the Tribunal in two arbitrations. The arbitrations arose under the Accord on Fire and Building Safety in Bangladesh signed on 15 May 2013. The Accord is an agreement between global brands and trade unions created in the aftermath of the Rana Plaza building collapse, to establish a fire and building safety programme for workers in the textile industry in Bangladesh. In 2016, IndustriALL Global Union and UNI Global Union commenced arbitrations under the Accord and the UNCITRAL Rules of Arbitration 2010 against two global fashion brands. The Tribunal, composed of Professor Hans Petter Graver, Mr Graham Dunning QC and Mr Donald Francis Donovan (presiding), was formally constituted on 3 February 2017. On 4 September 2017, the Tribunal issued a second Procedural Order, finding the claims to be admissible under Article 5 of the Accord and issuing directions on confidentiality and transparency. In its deliberations, the Tribunal accounted for the interest in the Accord from the public, numerous signatories and other stakeholders, but also the need to protect the business information and reputational interests of the brand companies. The arbitrations will now proceed to a merits phase, with hearings scheduled for the first half of 2018.

Company Reports and Press Releases