Thinking | 26 July 2019
In Australia, it’s estimated that around 15,000 people may live in conditions of modern slavery, forced labour, wage exploitation, human trafficking or debt bondage.1 The introduction of the Modern Slavery Act 2018 (Cth), which commenced on 1 January 2019, 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 actions taken to address these risks.
New mandatory reporting requirements will be imposed on Australian entities (including Commonwealth government entities), and foreign entities carrying on business in Australia, with an annual consolidated revenue of at least $100 million. Other entities may choose to report voluntarily.
Modern Slavery Statements must detail information about:
- the entity’s structure, operations and supply chains;
- the potential modern slavery risks associated with the entity’s structures, operations and supply chains (plus those of any entities it owns or controls);
- actions that were taken by the entity (or any entities it owns or controls) to assess and address those risks;
- how the entity assesses the effectiveness of those actions; and
- the process of consultation of the entity with any entities it owns or controls.
In April 2019, the Department of Home Affairs released its Draft Guidance for Reporting Entities which details the practical steps entities should follow to comply with the reporting requirement. In summary, an entity must:
- Identify whether it is required to report;
- Prepare a Modern Slavery Statement which responds to each mandatory criterion;
- Have the Modern Slavery Statement approved by the entity’s Board or other principal governing body, and signed by a responsible member of the entity;
- Provide the Modern Slavery Statement to the Department to be published online.
The first Modern Slavery Statement required under the Act must be submitted by 30 June 2020 (for calendar-year-reporting entities) or 31 December 2020 (for financial-year-reporting entities). After that, entities will be required to report annually. Modern Slavery Statements will be kept in a public online repository.
Accordingly, entities who are required to report should commence a risk analysis, and update policies, procedures and contracts with subcontractors to ensure that risks are identified and ideally eliminated. Hall & Wilcox would be pleased to assist.
NSW employers should also be aware that similar State legislation is being considered, having been sent back to the drawing board in June 2019. The Modern Slavery Bill 2018 (NSW) would apply to commercial entities with an annual turnover of at least $50 million and at least one employee in NSW who supply goods and services for profit. This represents a much lower threshold than the Act. In further contrast to the Act, the NSW Bill 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). NSW employers should be keenly watching the progress of the Bill to determine what future compliance requirements may look like.
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