Insights

29/06/18

Modern Slavery Bill introduced into Federal Parliament

On 28 June 2018, the Modern Slavery Bill 2018 (Bill) was introduced into the Federal Parliament.  The Bill establishes a mandatory reporting regime, under which large businesses and certain Commonwealth entities are required to report on the risks of modern slavery in their operations and supply chains, and the acts that they have taken to address those risks.

Under the Bill, “modern slavery” is expansively defined to mean conduct that is criminalised under Division 270 or 271 of the Criminal Code Act 1995 (Cth), which includes slavery, forced labour and debt bondage offences, as well as people trafficking and “the worst forms of child labour”, whether or not such conduct occurred in Australia or not.  

Reporting requirement

Any entity carrying on business in Australia with annual consolidated revenue of more than $100 million is required to produce a public annual report, or Modern Slavery Statement.  Reporting entities also include corporate and non-corporate Commonwealth entities that meet the $100 million revenue threshold. 

The Bill requires reporting entities to produce a Modern Slavery Statement in the approved form. The mandatory reporting criteria that must be addressed 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. 

The Modern Slavery Statement is intended to be a overview of an entity’s general process for assessing, preventing and addressing modern slavery, rather than a report detailing specific incidents.  It must be approved by the entity’s principal governing body (e.g. the board of directors) and signed by a responsible member of the entity, such as a company director.

The Bill allows for a joint Modern Slavery Statement to be submitted on behalf of multiple related reporting entities, which is intended to reduce the administrative obligations on corporate groups and other collections of entities. Non-reporting entities that operate in Australia but do not fall within the threshold revenue requirement may voluntarily provide a Modern Slavery Statement.

No penalties apply for failing to comply with this reporting requirement, or for producing misleading reports.  

Register of Modern Slavery Statements

The Bill establishes a register of Modern Slavery Statements that is to be publicly available online and maintained by the Minister. The Minister is to register all Modern Slavery Statements provided by reporting entities, even if they are non-compliant with the prescribed reporting criteria. The intention behind establishing a public register is to promote transparency in supply chain operations and to assist the market make informed consumption and investment choices regarding an entity’s goods and services.

NSW Bill 

Earlier this month, NSW also passed a Modern Slavery Bill (NSW Bill) with a similar reporting requirement.  Key differences between the Commonwealth and NSW Bill are the lower revenue threshold in NSW ($50 million), different definition of “Modern Slavery”, establishment of an Anti-slavery Commissioner in NSW, and penalties under the NSW Bill for failing to report or producing misleading reports (up to $1.1 million).  
The NSW Bill exempts commercial organisations from having to report under the NSW regime if that organisation is subject to a corresponding Commonwealth or State law, as prescribed by regulations.  It remains to be seen whether the Commonwealth bill will be treated as a “corresponding” law for the purposes of the NSW Bill.  

Next Steps 

The government will provide formal administrative guidance to accompany the Bill, which will include explanatory information regarding the conduct captured by “modern slavery” and the scope of the reporting requirement.  
The government has also proposed the establishment of a new Modern Slavery Business Engagement Unit within the Department of Home Affairs to support the implementation of the Bill.  
Once passed, the Bill is to be reviewed after three years.

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