Modern Slavery and the Construction Industry

There are around 50 million people enslaved in the world.

Although slavery feels far removed, its presence remains in countries like the United States, the United Kingdom and Australia. Modern slavery is not just a ‘third-world problem’ – more than half of all forced labour can be found in upper-middle income or high-income countries.1

What is modern slavery?

Modern Slavery involves the exploitation of people who are forced to work in harsh, illegal conditions often though deception, coercion or threats. In this newsletter, we will discuss the prevalence of modern slavery in the world today, specifically in the construction industry.

Modern slavery often goes unnoticed.

In the United States, it estimated that there are 1.1 million people living in modern slavery. In fact, slavery is still legal in the U.S. when applied to prisoners under the 13th amendment of the Constitution. U.S. labour laws exclude prisoners from protection against forced labour enabling detention centres and
prisons to compel detainees to work though threat without any adequate compensation or protection.2

In Australia, modern slavery is defined as conduct that falls under the provisions set out in Divisions 270 and 271 of the Commonwealth Criminal Code.3 It is also regulated under the Modern Slavery Act 2018 (Cth) (‘Commonwealth Act’),4 which has introduced a requirement for corporations to report on modern slavery in their supply chains and workplaces.

The Modern Slavery Act

The Modern Slavery Act 2018 (Cth) (‘Commonwealth Act’) introduced reporting requirements for large Australian ‘entities’ with a revenue of at least $100 million for the relevant reporting period. 5 An entity that does not meet the revenue threshold of $100 million but ‘carries on business in Australia’ may volunteer to comply with the requirements of the Act. In NSW, the Modern Slavery Act (NSW) (‘NSW Act’) has different requirements and penalties.6

Under the Commonwealth Act, non-compliance will result in the Minister publishing information about the entity on the Modern Slavery Statements Register. This includes the entity’s identity, details about when the minister requested a statement from them and, reasons as to why the Minister is satisfied that the entity has failed to comply with their request for a valid statement. There are no legal or financial implications for not abiding by the reporting requirements.

The Commonwealth Act does not require companies to state that they are slavery free – rather, they must highlight the effective measures they are taking to control risks. 7

The Construction Industry

The construction industry is subject to modern day slavery due to its reliance on low-skilled, manual, low- waged work which facilitates conditions conducive to exploitation. The sector is a high human rights risk due to its complex supply chains which routinely use outsourced labour. The industry’s use of raw materials and good from countries with weak human rights further exacerbate the problem.

“In the construction industry, labour exploitation is seen in both small-scale construction projects such as loft conversions and extensions, and in the supply chains of national and international firms.” NCA deputy director for modern slavery and human trafficking, Oliver Higgins.


Regulations

The regulations implemented by the government address the issue of modern slavery and are a good first step to increase transparency about modern slavery within the construction industry. Labour hire companies are prevalent in the construction industry. In 2023, the labour hire sector was worth $19 billion a year and consisted of 360,000 employees yet most companies.8 Despite this, labour hire companies often fall below the revenue threshold for mandatory reporting under the Commonwealth Act.

ASIC has highlighted that companies contracting to mining and construction sectors often use subsidiaries to hire workers on conditions substantially below conditions in the parent company’s enterprise agreement. Labour hire employees often face unequal treatment compared to those hired directly from the host organisation as a result of this.9

There is a noticeable shortfall of oversight, with the ACCR noting that many companies in the S&P/ASX top 100 did not disclose information about their labour hire.10 The lack of consistent, transparent reporting about labour hire companies creates an avenue for modern slavery to go unnoticed. Issues such as 72% of phoenix companies being labour hire providers or subcontractors within the construction industry make tracking modern slavery challenging.11

Exploitation of workers in the Construction Industry

Australia’s construction industry’s supply chains are global, extending to major hubs in Southeast Asia, The Middle East and Africa where migrant workers who are often unfamiliar with their rights are easily exploited. Migrant workers are more vulnerable to exploitation due to their lack of knowledge regarding salary, hazardous work, legality of contracts as well as debt-bondage. Visa insecurity is a powerful motivation amongst low skilled migrants to tolerate abuse in the workplace.12 Migrant workers that are not in Australia legally are at greater risk of being exploited in more severe and harmful ways. The ACTU reported that sham contracting practices extensively impact temporary visa holders, particularly in the construction and cleaning sectors.13

The Construction Industry imports materials from countries, such as India, Brazil and Cambodia, that are at high risk for modern slavery in their manufacturing processes for materials including brick, timber and rubber. Forced labour has been reported in brick kilns in India and Cambodia, with debt-bondage being a common tool for employers to force their workers into working in slave-like conditions. A report by the Anti-Slavery International revealed that 96% of brick kiln moulders were held under debt-bondage with all their wages being withheld for a period lasting eight to ten months, with workers being subject to an average of fourteen hours of work a day. 14 Children make a third of the estimated 23 million working in India’s brick kilns, with 65-80% of children under fourteen working for an average of nine hours a day during the summer.

“Young children are working for nine hours a day in dusty air filled with chemicals rather than going to school.” Anti-Slavery International’s Asia Programme Manager, Sarah Mount.

Modern slavery is important to detect in order to protect vulnerable people from exploitation. It is crucial that corporations actively investigate their supply chains and labour conditions to prevent such practices from occurring within their operations.


Contact Crisp Law for advice and information at:
Telephone: +61 2 8042 8701
Email: admin@crisplaw.com.au

  1. Global findings’, Walk Free ↩︎
  2. Eradicating modern slavery in the United States is a bipartisan responsibility’, Walk Free (Web Page, 21 January 2025) ↩︎
  3. Criminal Code Act 1995 (Cth). ↩︎
  4. Modern Slavery Act 2018 (Cth) ↩︎
  5. Modern Slavery Act 2018 (Cth). ↩︎
  6. Modern Slavery Act 2018 (NSW) ↩︎
  7. Modern Slavery Act 2018 (Cth) s 16 ↩︎
  8. Third interim report: labour hire and contracting’, Parliament of Australia (Report, November 2021) ↩︎
  9. Parliament of Australia, ‘Third interim report: labour hire and contracting’, Introduction (Report, November 2021) ↩︎
  10. Parliament of Australia, ‘Third interim report: labour hire and contracting’, Labour hire and its impacts (Web Page) ↩︎
  11. ASIC, Illegal Phoenix Activity ↩︎
  12. Human Rights Law Centre, Temporary Workers (Web Page, June 2023) ↩︎
  13. Professor Allan Fels and Professor David Cousins, Department of Employment and Workplace Relations, Report of the Migrant
    Workers’ Taskforce, (Final Report, March 2019) ↩︎
  14. Anti-Slavery, Appalling levels of slavery in India’s brick kilns, (Web Page, September 2017) ↩︎

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