In 1857, the political equilibrium of the United States of America was rocked by the decision of the United States Supreme Court in Dred Scott v Sandford. That decision called into question the constitutionality of the so-called Missouri Compromise (prohibiting slavery in the northern continental US with the exception of Missouri), which had been a key part of the strategy to contain the spread of slavery, rather than to eliminate it, a challenge which the then current political wisdom judged to be unachievable.

Landmark slavery case a trigger for American Civil War

Dred Scott was a slave who had been sold to a master who took him to free territory in modern-day Minnesota, but then back to Missouri, where Scott tried to sue for his freedom. Unexpectedly, the Court held that Scott was property and not a citizen at all, and thus could not sue (or be sued) in the courts.

The case, through which it had been hoped that the slavery issue would be put to rest as a bone of contention, instead did the reverse, providing arguably the most significant single trigger for the Civil War.

After the war, the 14th Amendment to the US Constitution provided (among other things) that any person born or naturalised in the US was a citizen, reversing the Dred Scott v Sandford decision, and setting the scene for the next racial inequality battleground: the "Jim Crow" segregation laws, only completely eradicated in America in the 1950s.

Slavery in production chains of goods sold in Australia

Those events were of course confined to the continental United States. Today, globalisation has sharply diminished the significance of territorial boundaries, and people (and indeed nations) are now exploring what can be done about slavery worldwide.

Enslavement may only be found in far-flung countries, but it is on our doorstep in the form of tee shirts and tank tops on sale in Australia for half the price of just the fabric involved, let alone the cost of manufacture. Can Australia do anything about this?

The answer is "yes", if we are talking about political campaigning and the power of social media. But to find out what can be done legally is more complex.

"Territorial competence" – the authority to make laws within a particular geographic territory

A fundamental of the Westminster model of governance (and indeed of the international legal framework) is that the power of the legislature to make laws is limited to the territory governed by the legislature. For example, the NSW Parliament cannot make valid laws about what happens in Queensland or Victoria. The Parliament of Australia cannot make valid laws binding the citizens of Fiji or Finland.

Some Federal laws designed to target wrongful behaviour overseas superficially appear to have that kind of effect: for example, laws relating to child sex tourism, or fighters engaged in the current conflicts in the Middle East. However, these all have an Australian "tag", focusing on conduct of citizens while they are in (or returning to) Australia, if the conduct of these people while in Australia can be linked to the wrongful activities overseas.

And nationality does not matter, as Schapelle Corby and hosts of others have found out to their cost. With very limited exceptions, if you are lawfully present in a country, you are subject to its laws, whatever nationality you hold.

So, Federal laws can be made about people or companies present in Australia. But how can those laws affect what businesses in Bangladesh or Burkina Faso do? To answer this, we need to look at another aspect of the powers of the Federal Parliament.

The external affairs power – Federal government's power to enter into international treaties

It is generally well-known that, while a State legislature has plenary powers enabling the making of laws about pretty much everything within its territorial boundaries, the Federal Parliament can only make laws within the law-making powers given by the Constitution. An important source of power, in the present context, is the "external affairs" power ( section 51 (xxix) of the Constitution).

This gives the Federal government the power to enter into international treaties, conventions, and other binding agreements. If the Australian government signs up to a treaty or convention, that has the effect of giving it legislative power it would not ordinarily have.

If it could not do this, the ability to sign up to the treaty would be meaningless. The power to stop the building of the Franklin Dam stemmed from such a treaty, as does the power to make Federal anti-discrimination laws and a host of other laws.

Commonwealth law takes precedence over state law in the event of inconsistency

However, this is a two-step process as far as the States are concerned. Merely signing a treaty does not bind a State. The Commonwealth must then enact a law to give effect to the treaty obligations, relying, if necessary, on section 109 of the Constitution, which provides that if a Commonwealth law and a law of a State are inconsistent with each other, the Commonwealth law prevails.

Modern slavery and federal government's ability to bind Australian companies

When people talk about "modern slavery" they are of course not talking about the Dred Scott kind, but instead about people who, although theoretically free to walk away from enslavement, in practice cannot because they will starve, or fear violence against themselves or their families. (Given that there are "working poor" in the United States because there is no minimum wage, we need to take care in identifying exactly what is to be targeted.)

However the framework is there, as has been explained above. The Federal Parliament cannot make rules binding overseas producers, but it can bind Australian companies which import the products.

A current proposal is to require companies with revenues above $100 million to report annually on what steps they have taken to ensure that their supply chains do not involve forced labour, human trafficking and the like.

Obviously, the capacity of the federal government to legislate is dependent on entry into a relevant international agreement or agreements. One such instrument was signed in 2011. A key issue, however, is that the government can only regulate the conduct of companies within Australia, and frequently international supply chains are convoluted and complex.

Need for substantial connection with treaty obligations for new laws to be passed

Another key issue is that the federal government cannot make any law it pleases just because there is some connection with a treaty. There must be a substantial connection between the treaty obligations and the law that it proposes to make, especially if the law intrudes into an area traditionally regulated by the States. However, as companies are entirely the subject of federal regulation by virtue of section 51 (xx) of the Constitution, this is of less concern here.

So, as is often the case, there are competing considerations. The "softly, softly" approach being advocated may be taking account of the fact that if the federal government is seen to overreach, it risks a legal challenge which, if successful, would set the cause back. That's what happened with the Missouri Compromise, albeit in a rather different way. Watch this space, as they say.

Geoff Baldwin
Commercial contracts
Stacks Champion

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