Due Diligence in Modern Slavery Investigations: Lessons from the Uyghur Congress Case for Australia

Modern slavery encompasses a broad range of ownership and exploitative conduct, including forced labour, human trafficking, debt bondage, and other forms of coercive or deceptive control over individuals. Such conduct continues to persist across industries, often hidden within the complex layers of global commerce and trade. Whilst modern slavery sits across the UN Guiding Principles on Business and Human Rights, which emphasise the human rights responsibilities of businesses there is much to do to actively prevent and mitigate the risks of modern slavery within supply chains.

In Australia, in addition to section 270 and 271 the Criminal Code (Cth) which criminalise a range of activity which falls within ‘modern slavery’, the need to regulate modern slavery has been recognised through the introduction of Australia’s Modern Slavery Act 2018 (Cth) (‘MSA’ or ‘the Act’). The MSA is intended to operate as a transparency mechanism, mandating corporate disclosure statements detailing actions taken to “assess and address” modern slavery risks within supply chains. However, with 66% of companies failing to address all of the mandatory reporting requirements under the Act within its first two years, widespread concerns of non-compliance prompts doubt regarding the clarity and enforceability of the Act’s provisions and whether it can ever be considered to be a due diligence requirement. As recent developments in modern slavery due diligence take shape, we explore how clarification may emerge surrounding the threshold for due diligence and investigative responsibility around modern slavery allegations.

This article analyses how interpretation of the MSA’s s 16(1(d) requirement for entities to describe, in their modern slavery statements, the actions taken to assess and address risks of modern slavery in operations and supply chains, shapes corporate attitudes to “assess and address” modern slavery risks in practice. We consider the Act’s lifecycle and attempt to contextualise legislative intention, examining the Act’s interpretation since its introduction to uncover any evidence of effectiveness or avenues for recourse. Finally, we take a look at the MSA’s review and due diligence under regulatory frameworks in the light of the recent World Uyghur Congress (WUC) case, in order to consider the future of compliance in the context of modern slavery.

Statutory Interpretation and Legislative Intent

Australian courts apply a constructional methodology balancing literal and purposive interpretation; the latter introduced to circumvent the rigidity of the former. The historical setting preluding the Act’s introduction provides legislative purpose, as similar global developments necessitated a Parliamentary inquiry (‘the inquiry’) into establishing an Australian Modern Slavery Act. The MSA’s long title suggests a clear legislative intent, but it lacks guidance on the scope of obligation. “Assess and address” is central but undefined; although the s 16(1(d) provision offers examples of actions, this ambiguity allows wide variation in corporate responses and risks superficial compliance.

Supplementary Guidance and Interpretive Aids

Whilst the Business and Human Rights agenda is important, one question is how the courts in Australia will interpret the legislation: Parliamentary materials offer clarification of statutory purpose. The MSA’s Explanatory Memorandum defines other terms in the provision but avoids “assess and address”. The Hidden in Plain Sight report conducted following the inquiry highlights an emphasis on a collaboration with businesses over enforcement, suggesting a voluntary ethos that weakens the regulatory framework. While the Government’s Guidance for Reporting Entities offers hypothetical scenarios of potential compliance, they remain too vague and obfuscate the substance necessary for meaningful and adequate fulfilment of reporting requirements. Guidance from the Attorney-General’s Department categorises corporate responses as “good,” “compliant,” or “non-compliant,” but does not articulate why actions fall into these categories. Such generality contributes to a reporting culture that encourages ‘box-ticking’ over substantive engagement, where a business’ reporting can be compliant but not necessarily ‘good’. While allowing for greater accessibility, it disincentivises businesses from complete reporting and lacks consequences for incompleteness. In addition, whilst the Guidance for Reporting Entities encourages continual improvement/building on responses each reporting period the hypothetical examples from [at p35] appear to lack the substance needed to meaningfully comply – perhaps an inevitable result of a system limited to reporting.

International Influences and Comparative Legislation

Australia’s obligations under various international instruments heavily influenced the MSA’s design and framework, though their non-binding nature limits domestic enforceability. Other jurisdictions illustrate similar challenges. California’s Transparency in Supply Chains Act (‘CTSCA’) mandates disclosures in reporting including relevant training and audits, but only requires companies to state whether such measures exist. In fact, a US District Court found that the CTSCA’s legislative intention is simply to enforce the distribution of information for the benefit of investors. UK legislation (‘UKMSA’) similarly lacks a substantive requirement by deeming disclosures optional. It is unfortunate that each statute appears to mirror each other, rather than the MSA taking the opportunity to make improvements on its predecessors’ shortcomings. While the MSA does enforce mandatory compliance, its simplicity lends to the permissive reporting approach found under the UKMSA. This implicit illegitimacy of the provision manifests within a robust bilateral relationship; one could reasonably assume that given the UKMSA’s indifference to compliance, the former colony’s MSA would follow.

The Common Law Position and Vicarious Liability

Australian courts have yet to interpret the MSA’s “assess and address”. However, a Queensland Supreme Court decision interpreting the term “address” contained in a different statutory requirement found that merely responding to criteria was sufficient, regardless of quality.

Businesses can still be held liable elsewhere in the law, however. Vicarious liability implicates a corporation if they know of statutory breaches, but fail to act. The UK Supreme Court in Barry redefined the “close connection” test by stating that the required connection is between the tort and the activities of the subsidiary as required by the primary. However, imposing vicarious liability on a primary would be “beyond its principled boundaries” – so too can be said of the MSA’s – if they affirmatively unauthorise modern slavery practices in their supply chains.

Reform and the MSA Review

The MSA’s statutory review identified deficiencies in guidance and enforcement mechanisms, highlighting that entities often simply describe the risks themselves, not how they assess and address these risks. A central concern in the review was the need for stronger due diligence; while the MSA requires its disclosure, there is no active obligation. It is envisaged that due diligence could support entities in fulfilling the provision’s requirements given that the MSA, through almost exclusive adoption of the UKMSA, failed to consider other regulatory developments. In their 2024 response to the review, the Government said it would “explore the desirability of amending the mandatory reporting criteria” and consider the introduction of a due diligence system.

The 2017 French ‘Duty of Vigilance Law codifies due diligence duties by obliging entities to take action and implementing a civil complaint pathway for victims. A similar framework adopted in Australia would aid in circumventing the obstacles associated with bringing a tortious claim of vicarious liability, as well as clarifying “assess and address” for reporting entities.

The WUC Case and Its Significance

The landscape of modern slavery due diligence was given clarity by the World Uyghur Congress (WUC) case in the English Court of Appeal, which scrutinised the responsibilities of both governments and businesses in confronting modern slavery risks within global supply chains, specifically relating to cotton from China’s Xinjiang Uyghur Autonomous Region (XUAR). The WUC, an NGO representing Uyghur interests, provided extensive evidence to UK authorities that cotton imports from XUAR were the product of systemic forced labour and likely constituted “criminal property” under anti-money laundering laws, such as section 340 of the Proceeds of Crime Act 2002 (UK) (POCA). Despite this, the UK National Crime Agency (NCA) initially declined to investigate, arguing that more concrete evidence linking specific shipments to forced labour was required. They argued that POCA could not apply given that no specific shipment of cotton had been identified, as well as the adequate market value consideration exemption under section 329(2)(c) under POCA.

The High Court sided with NCA, but this was overturned by the Court of Appeal decision in June 2024 which ruled that the NCA’s failure to investigate was unlawful, emphasising [the “striking consensus” (at [16]) of the pervasive and well-documented nature of forced labour abuses in the XUAR cotton supply chain.

This case underscored that due diligence in modern slavery cases cannot merely rely on formal reporting or box-ticking, but must be dynamic and responsive to credible risks, even where direct evidence is impossible to obtain. For companies sourcing from, or otherwise connected to, the Uyghur Region, the new due diligence norm may mean shifting suppliers, adopting risk mitigation protocols, or ceasing business altogether if risks cannot be reliably managed.

Conclusion 

The WUC Case highlights a growing expectation that modern slavery due diligence must extend beyond formalistic reporting, to include active investigation and risk mitigation even in the absence of direct evidence.

For Australia, this case underscores the limitations of the MSA, which, despite mandatory reporting, lacks enforceable due diligence obligations and clear compliance standards.

If Australia is to meaningfully combat modern slavery, it must reform the MSA to embed binding due diligence requirements, provide clearer guidance on expectations, and introduce enforcement mechanisms. Drawing on international developments such as France’s Duty of Vigilance law, Australia has the opportunity to shift from passive transparency to active accountability.