Modern Slavery, Human Trafficking & People Smuggling? (Part I)

Author: Paul Curwell


According to Antislavery.Org, “someone is in slavery if they are forced to work through coercion, mental or physical threats; trapped and controlled by an employer; dehumanised, treated as a commodity, or sold as property; and subject to physical movement constraints”. Antislavery.Org identifies six primary forms of slavery:

  • Forced labour
  • Debt bondage (bonded labour)
  • Human trafficking
  • Descent-based slavery (people born into slavery)
  • Child slavery (as opposed to child labour)
  • Forced and early marriage

The 2016 figures from the International Labour Organisation (ILO) are startling:

  • 40.3 million people are in modern slavery, including 24.9 million in forced labour
  • This is a ratio of 5.4 victims (slaves) per 1,000 people, with 25% of those being children
  • 64% of the victims of forced labour are exploited in private sector industries such as domestic work, construction or agriculture, and almost 17% are in forced labour imposed by government authorities
  • Females are disproportionately affected, accounting for 58% of forced labour victims across all sectors except the commercial sex industry, where they represent 99% of victims

Globally, the international legal framework to address modern slavery includes the Universal Declaration on Human Rights, and various other international conventions and into different forms of slavery, forced labour and human trafficking.

It is common to see the terms ‘modern slavery’, ‘human trafficking’ and ‘people smuggling’ used interchangeably, but they are actually different concepts with different actors, motives and outcomes (see Australian Criminal Offences below).

Key Definitions

Whilst the concepts of Modern Slavery and Human Trafficking are related, People Smuggling is a different concept, as outlined below:

  • Modern Slavery in Australia is defined as conduct that consitutes:
    • An offence under Division 270 or 271 of the Criminal Code 1995 (Cth),
    • A form of Child Labour (as defined by the ILO), or
    • Trafficking in persons, as defined in Article 3 of the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime (2000)
  • Human Trafficking – the physical movement of people (recruiting, transporting or harboring) across and within borders through deceptive means, force or coercion.  The people who commit human trafficking offences are motivated by the continuing exploitation of their victims once they reach their destination country (AFP)
  • People Smuggling – the organised, illegal movement of people across borders, usually on a payment for service basis (AFP). Unlike Human Trafficking, although ‘illegals’, smuggled people are free upon arrival in their destination country

Australia’s regulatory landscape

Broadly speaking, there are now seven main pieces of legislation relating to modern slavery and human trafficking in Australia:

  • Criminal Code Act 1995 (Cth) criminalises trafficking, slavery and slavery-like practices
  • Crimes Act 1914 (Cth) protects trafficked persons when giving evidence and allows a court to make reparation to victims
  • Migration Act 1958 (Cth) creates offences for allowing an unlawful non-citizen to work or breach work-related visa conditions
  • Fair Work Act 2009 (Cth) empowers the Fair Work Ombudsman to enforce compliance with the Fair Work Act
  • Marriage Act 1961 (Cth) provides offences for solemnising underage marriages
  • Proceeds of Crime Act 2002 – provides for tracing, restraining and confiscating the proceeds of crime, including trafficking and slavery
  • Modern Slavery Act 2018 (Cth) is the newest piece of slavery-related legislation in Australia

What does the Modern Slavery Act 2018 (Cth) require of Australian Companies?

At the macro level, the purpose of the Act is to raise awareness and increase transparency of the problem of Modern Slavery in Australian supply chains, and to require companies to take steps to understand the risks and change existing practices which are conductive to slavery and slave-like conditions. The Act requires companies that meet the criteria (termed a ‘reporting entity’) to submit a modern slavery statement annually to the relevant Minister, which is also made available to the public. Mandatory content of these statements includes describing:

  • (b) the structure, operations and supply chains of the reporting entity
  • (c) the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls
  • (d) actions taken by the reporting entity to assess and address those risks, including due diligence and remediation processes
  • (e) how the reporting entity assesses the effectiveness of such actions
  • (f) the process of consultation with (i) any entities that the reporting entity owns or controls; and (ii) in the case of a reporting entity covered by a statement under section 14—the entity giving the statement; and
  • (g) any other information considered relevant

By requiring larger companies to produce these statements, government’s objective is that over time modern slavery risks in the supply chain will be reduced and that these requirements will propagate throughout global supply chains, including down to smaller suppliers – after all, a rising tide floats all boats.

Definitions of slavery in the Modern Slavery Act are mapped to the various Australian criminal offences, meaning that in order to identify inherent risks or exposures of a prospective third party or business partner, potential joint venture partner or acquisition target, you need to be able to determine their exposure to the various offences.

Australian Criminal Offences

Criminal Offences in Australia are either national, at the Commonwealth level and enshrined in either the Crimes Act 1901 (Cth) or the Criminal Code Act 1995 (Cth), or State or Territory-based jurisdiction (e.g. Crimes Act 1900 (NSW)). Offences pertaining to Slavery, Trafficking and People Smuggling can be found in the Criminal Code Act 1995. To make it easier to identify slavery and trafficking related risks during initial or ongoing due diligence, I have developed the following taxonomy based on the legislation which can be used as a reference:

High risk industries exposed to modern slavery

Some industries are more typically exposed to modern slavery risks than others. These include the following, which have been grouped below by typology:

TypologyHigh Risk Industries
Forced Labour (Global Slavery Index 2018 – see below for citation)Cotton
Garments – Apparel and Clothing Accessories
Sugar Cane
Electronics – laptops, mobile phones, computers
Human Trafficking (Anti-Slavery International – see below for citation)Trafficking is the act of moving the person internationally. Upon arrival they are usually driven into other typologies, such as:
Sexual Servitude (prostitution)
Forced labour
Forced begging
Forced organised crime
Domestic servitude
Forced marriage
Forced organ harvesting
Servitude (Anti-Slavery International – see below for citation)Domestic servitude (e.g. housekeeping, cleaning, maid duties, childcare, cooking)
Sexual servitude (forced prostitution)
Deceptive Recruiting (International Labour Organisation)Labour hire organisations and their extended networks of recruiters use deception to make an adult or parent believe that they (or their child) will be going to work in a reputable job, only for the victim to find they are later channeled into Forced Labour or Servitude. Sometimes, victims even pay for their traffickers.
Debt Bondage (Anti-Slavery International – see below for citation)Agriculture
Brick kilns
Breakdown of exposure to modern slavery by Industry

As illustrated above, ‘deceptive recruiting’ and ‘human trafficking’ can be pathways for victims to Forced Labour and Servitude. Companies would rarely be exposed to every typology of modern slavery identified above: typical activities of Australian companies mean that modern slavery in the supply chain is most likely to manifest itself as Forced Labour or Debt Bondage, although Servitude may arise in the case of expatriates working offshore who employ domestic workers via an ‘agent’ for tasks such as household duties.

Jurisdictions and Human Trafficking Patterns

A number of useful publications exist to understand the prevalence and risk profile of human trafficking in the supply chain, including the annual ‘Trafficking in Persons‘ report published by the US State Department and the ‘Global Reports on Trafficking in Persons‘ issued by the United Nations Office on Drugs and Crime (UNODC).

Every country is different, and is typically classified as an Origin (source), Transit, or Destination country for Human Trafficking. As shown in this figure from the UNODC (2006), Australia is a Destination country for Human Trafficking, whilst many countries in Asia are both Origin and Destination countries. The prevalence of Destination countries in Asia means there is an increased likelihood that various forms of modern slavery would be prevalent in global supply chains given that Asia is the world’s manufacturing hub.

Photo Credit: United Nations Office on Drugs and Crime (2006). Trafficking in Persons:
Global Patterns, April 2006, Vienna,

As a primarily Destination country, Australia also has an interesting Human Trafficking profile, with key highlights from the 2019 US State Department Trafficking in Persons report including:

  • Both domestic and foreign victims are exploited in Australia
  • Women from Asia, Eastern Europe and Africa are frequently exploited in the commercial sex industry, whilst men are typically engaged in forced labour
  • Some women may also be exploited via forced marriages or domestic servitude situations
  • Employers and labour hire agencies are increasingly being linked to forced labour, bonded labour and exploitation (wage underpayment, falsification of records, excessive work hours) in agriculture, cleaning, construction and hospitality
  • There have also been instances of people on student visas becoming victims of modern slavery scams, whilst also having to pay substantial academic and related tuition fees
  • Also, many overseas students do not understand Australia’s complex employment award (salary) schemes, and some students do not feel they can approach the police for assistance due to a lack of trust in their home country
  • There have also been allegations of foreign diplomats abusing foreign household staff in Australia, as these household staff may not fall under standard Australian protections due to their employer’s diplomatic status

As we can see, no country is immune from the scourge of Modern Slavery, however a greater understanding of the way it can manifest both in the supply chain and locally in Australia means more effective risk identification and targeted due diligence practices, which in time will help combat this global problem.

Next Steps – Due Diligence, Risk Assessments and Customer Risk

As the first in a three-part series, this is Part I of a three part series on modern slavery and human trafficking. Part II will be published shortly, and will discuss the guidance provided to ‘Reporting Entities’ under the Modern Slavery Act 2018 in terms of their obligations, with a target audience of supply chain professionals and investment managers. Part III will address risks relating to slavery and human trafficking offences, which are designated categories of offences for money laundering (often referred to as ‘predicate offences’) by The Financial Action Task Force (FATF / GAFI).

Further Reading

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