On 29th November the Australian Parliament passed the Modern Slavery Act 2018 — carrying an imperative for businesses in Australia to take action on their modern slavery risks and responsibilities.
The date of commencement is expected to be before the end of 2018. Once it commences The new legislation will require any entity carrying on a business in Australia (includes companies, partnerships and trusts) with an annual consolidated revenue of more than $100 million to produce and submit an annual report on measures taken to address modern slavery.
These reports will be known as ‘Modern Slavery Statements’ (MSS). It will also apply to foreign companies operating in Australia. The Government will establish a ‘Public Accessible Public Register for the lodged MSS’s, which will be administered by the Federal Department of Home Affairs.
They will also establish a Modern Slavery Business Engagement Unit to provide guidance, assistance and advice to affected businesses. The Unit will provide advice to businesses about how to comply with the modern slavery reporting requirement and also conduct awareness raising and training for businesses about modern slavery risks in supply chains.
The Department are currently preparing detailed guidance for businesses which will set out how to comply with the modern slavery reporting requirement. This guidance will cover indicators of modern slavery risks, how to assess and address modern slavery risks, indicate best practice and give practical examples about how to comply with the legislation.
AMIC has been informed that the Department will be releasing a draft of the guidance material for public consultation in January 2019, to which the AMIC will respond.
A timetable for this proposed legislation and corresponding activities is contained on page 54 of the Explanatory Memorandum (EM), which can be accessed here.
The Bill defines ‘Modern Slavery’ as, ‘human trafficking, slavery and slavery like practices, servitude, forced labour and debt bondage’.
The content of the annual MSS must include the entity’s:
- Identity, structure, operations and supply chains;
- Potential modern slavery risks in their operations;
- any actions taken to address modern slavery risks (including due diligence and remediation processes); and
- the effectiveness of such actions
Although it will apply to entities who have an annual consolidated revenue of more than $100 million, there will be no punitive penalties if businesses fail to submit a report. However, this could be reviewed 3 years after the legislation commences. The Federal Government have stated their view, ‘that taking no action to addressing modern slavery would leave the Australian business community exposed to legal and reputational risks that can undermine their competitiveness”.
The Modern Slavery Bill generated debate in both the House and Senate, passing with bipartisan support and several amendments to the legislation:
- Explanations for failure to comply: If the Minister is reasonably satisfied that an entity has failed to comply with the reporting requirements, the Minister can request that the entity provide an explanation and/or undertake remedial action. The Minister can publish information about entities that have failed to comply with a request.
- Minister’s Annual Report: The Minister must prepare an Annual Report assessing implementation of the Act, including an overview of compliance by entities and the identification of best practice modern slavery reporting under the Act during the year.
- Three-year review: The Government agreed to a review of the legislation in three years’ time, which will include whether additional compliance measures are needed.
Labor has signaled that it will push for further amendments if elected into Government next year, including civil penalties for non-compliance, an Independent Anti-Slavery Commissioner, and a public list of entities required to report.
NSW already has its own Slavery Legislation
On June 27, New South Wales adopted its own annual modern slavery reporting requirement, as part of its Modern Slavery Act (the “NSW Act”).
Organisations with employees in NSW and a turnover of over AUD $50 million are required to publish modern slavery statements under the NSW law. The Government has stated that businesses reporting under the federal legislation will not need to do so under the NSW law.