New modern slavery legislation introduced into Federal Parliament

On 28 June 2018, the Modern Slavery Bill 2018 (Cth) (Bill) was introduced into Federal Parliament. The introduction of the Bill follows a parliamentary inquiry which took place last year.

The Bill aims to minimise modern slavery practices in the Australian market by requiring large businesses to report on modern slavery risks in their operations and supply chains and the actions they have taken to address these risks.

The definition of ‘modern slavery’ covers a broad range of offences including but not limited to:

• forced labour
• wage exploitation
• child labour
• debt bondage
• human trafficking and
• child labour.

Under the Bill, reporting requirements apply to Australian entities, and foreign entities carrying on business in Australia, with an annual consolidated revenue of at least $100 million. Entities which are not required to comply with the reporting requirements may choose to do so voluntarily.

It is predicted that if passed, more than 3000 entities will be subject to the reporting requirements under the Bill.

Entities to which the reporting requirements apply will be required to make annual public reports (Modern Slavery Statements) within six months after the end of the entity’s financial year.

Modern Slavery Statements must detail information about:

• the entity’s structure, operations and supply chains
• the potential modern slavery risks associated with those structures
• actions that were taken by the entity to assess and address those risks and
• how the entity will assess the effectiveness of those actions.

Modern Slavery Statements will be kept in an online repository that may be accessed by the public.

The Bill is seen as a significant step for Australia in eliminating modern slavery in supply chains. However, concerns have been raised about the effectiveness of the mandatory reporting scheme given that the Bill does not provide for any penalties in circumstances where an entity fails to comply with its reporting obligations.

The Bill has been referred by the Senate to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 24 August 2018.

NSW employers should, however, be aware that the similar legislation was introduced in the state on 27 June 2018. The Modern Slavery Act 2018 (NSW) (Act) applies to commercial entities with at least one employee in NSW who supply goods and services for profit and has an annual turnover of at least $50 million, a much lower threshold than the Bill. In further contrast to the Bill, the NSW Act provides for penalties in circumstances where an entity fails to comply with its reporting obligations with penalties of up to 10,000 penalty points (currently $1.1 million).