Your obligations under Australia's new Modern Slavery Bill
Monday, 17 September 2018 | By Grant Holley
Australia’s new Modern Slavery Bill 2018 (Cth) (‘the Bill’) was introduced into the House of Representatives on 28 June 2018 and is expected to be passed by the end of the year with bipartisan support. The Bill’s purpose is to address modern slavery risks in the supply chains of Australian goods and services by establishing a reporting framework for Australian entities.
The Bill defines “modern slavery” to include a wide variety of offences such as slave trading, servitude, forced labour, deceptive recruiting for labour, forced sexual services, trafficking in persons and debt bondage.1 The UN estimates that there are currently 40 million victims of modern slavery Worldwide. This Bill is a landmark piece of legislation in Australia’s ongoing efforts to see an end to these transnational crimes.2
New South Wales has also introduced a Modern Slavery Act 2018 (NSW) (‘the NSW Act’) which received assent in June.
Will your business be affected by the Bill?
‘Reporting entities’ under the Bill will include all Australian entities and entities carrying on business in Australia which have a consolidated revenue of at least $100 million within a financial year. This includes business structures such as corporations, partnerships and trusts and is estimated to capture over 3000 entities nationally. Under the NSW Act any commercial organisation with employees in NSW that supplies goods and services and has a total turnover in a financial year of more than $50 million must comply with the legislation.
What are your reporting obligations?
Reporting entities will be required to give the Minister a modern slavery statement within 6 months of the end of the financial year. These statements must meet certain formality requirements including being approved by the principal governing body and signed by a responsible member of the entity.
Modern slavery statements must describe:
- the structure, operations and supply chains of the reporting entity;
- the risks of modern slavery practices in the operations and supply chains of the entity;
- the actions taken by the entity to assess and address those risks including due diligence and remediation processes;
- how the reporting entity assesses the effectiveness of such actions; and
- any other information the entity considers relevant.
What are the consequences of non-compliance?
The current form of the Bill does not impose any penalties for non-compliance. The government has chosen to focus on encouraging a culture of transparency, open communication and the sharing of effective initiatives to combat slavery risks rather than taking a punitive approach. It is relying on consumer pressure and reputational risk to drive compliance and has established a Modern Slavery Statements Register to try and achieve this. The Register will make all all modern slavery statements available to the public online. This will allow consumers, NGOs and other stakeholders to compare and analyse statements made by entities and hold them accountable.
However, businesses operating in NSW must be aware that a penalty of up to $1.1 million applies for failing to prepare or providing false or misleading information in a modern slavery statement.
How to begin preparing
Now is the time to start becoming familiar with the new reporting framework established by the Bill. In order to prepare for their new statutory obligations, businesses should begin reviewing existing supply chain relationships and gathering information on what measures and policies they already have in place to identify and address modern slavery risks. They should also consider what actions may be required to mitigate against these risks and consider updating or drafting new polices in response. The cost of drafting, finalising and approving a statement has been estimated to be $21,950 per entity. This includes the cost of gathering information from suppliers, having a statement reviewed by senior staff, approved by the entity’s board and signed by the director or equivalent.
Please do not hesitate to contact us if you have any queries.
Authors: Grant Holley (Partner) and Hannah MacPherson (Law Clerk)
1See, Criminal Code Act 1995 (Cth) divs 270–271.
2Global estimates of modern slavery: Forced labour and forced marriage, International Labour Office, Walk Free Foundation and International Organization for Migration, Geneva, 2017.