Out-Law / Your Daily Need-To-Know
Legislation to tackle modern slavery was introduced in Australia in 2018.
This guide sets the main legal requirements arising for businesses under the Commonwealth Modern Slavery Act 2018 (Cth).
What is modern slavery?
Modern slavery exists in or affects trade in all countries. It is a serious organised crime that results in major human rights abuses. The crime includes slavery, forced or compulsory labour, child labour and human trafficking. Whilst it is difficult to establish the scale of the issue, research by the International Labour Organisation (ILO) has estimated that over 40 million people globally are victims of modern slavery.
Read more on international modern slavery law
Companies need to have policies and procedures in place to help them identify and root out modern slavery risk in their supply chains. Doing this will not only enable them to demonstrate a culture and commitment to compliance and, in particular, to good corporate governance, but also avoid reputational damage from any actual or perceived failure of theirs to address the problem. It will also help them comply with any legal obligations arising – such as those stipulated in the Commonwealth Modern Slavery Act 2018 (Cth).
Legislative requirements under the Commonwealth Modern Slavery Act
The Commonwealth Modern Slavery Act 2018 (Cth) imposes similar requirements to those that apply under the UK Modern Slavery Act. It requires certain entities to prepare an annual modern slavery statement describing the risks of modern slavery in its operations and supply chains and those of any entities owned or controlled by it.
Who is in scope of the requirements?
The 2018 Act applies to entities, including partnerships, that have a consolidated revenue of at least AU$100 million (US$65.76m) over their reporting period and are either an Australian entity at any time during the reporting period or carry on business in Australia during the report period. It also applies to the Commonwealth government and to its corporate bodies. Other entities may also voluntarily undertake to comply with the 2018 Act.
Core duties arising under the Act
Entities in scope of the 2018 Act must report annually on the risks of modern slavery in their operations and supply chains, and the actions they are taking to address those risks.
The 2018 Act sets out mandatory criteria for modern slavery statements. These include a description of the structure, operations and supply chains of the entity and an assessment of the risks of modern slavery practices in its operations and supply chains. Steps taken to assess and address those risks, including due diligence and remediation processes, must also be included, along with details of how the effectiveness of such measures are assessed.
Reporting entities must include within the scope of their disclosures information pertaining to other entities they own or control together with a description of the process they followed for consulting with them on the issues.
A modern slavery statement for a single reporting entity must be approved by a “principal governing body” of the reporting entity – e.g. board of directors – as a standalone document. It must also be signed by a responsible member of the reporting entity, such as a director on the board.
The modern slavery statements are submitted to the Australian Border Force. The reports are retained in a public repository known as the modern slavery statements register. Statements on the register may be accessed by the public, free of charge, on the internet.
Sanctions for failure
The 2018 Act does not provide for any sanctions, financial or criminal, for a breach of its requirements. However, reputational issues could arise for organisations that fail to comply.
If the Minister for Home Affairs is reasonably satisfied that an entity has failed to comply with a requirement to give a modern slavery statement, they can ask the entity to either explain that failure within 28 days or to undertake specified remedial action. Further failure may be published on the modern slavery statements register or in any other way the minister considers appropriate.
State legislation
The Modern Slavery Act 2018 (NSW) requires state-owned corporations in New South Wales that are not otherwise obliged to report under the Commonwealth legislation to “voluntarily” publish a modern slavery statement in accordance with the requirements of the 2018 Act.
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