IN A move that will affect not only large entities but also those in the supply chain, the Federal Government has announced it will introduce legislation to enact a Modern Slavery Act by mid-2018.
This follows the Final Report of the Foreign Affairs and Aid Sub-Committee of the Parliament’s Joint Standing Committee on Foreign Affairs, Defence and Trade, Hidden in Plain Sight, tabled in December last year (see related article), and an extensive consultation process to develop a reporting requirement.
The reporting requirement will require entities with a $100 million annual consolidated revenue to publish annual public statements on their actions to address modern slavery in their supply chains and operations. This will capture approximately 3,000 entities.
Key features of the reporting requirement will include:
- Reporting on all modern slavery practices criminalised under Commonwealth law, including slavery, trafficking in persons, servitude, forced labour and forced marriage.
- A central public repository to ensure all Modern Slavery Statements are easily accessible.
- Four mandatory reporting criteria, requiring information about their structure, operations and supply chains; potential modern slavery risks; actions taken to address these risks; and how they assess the effectiveness of their actions.
- A review of the reporting requirement and its effectiveness three years after it takes effect.
- A dedicated Business Engagement Unit in the Department of Home Affairs which will promote best-practice, administer the central repository and undertake awareness raising and training.
- Guidance for business about the reporting requirement, drafted in consultation with business and civil society.
- Reporting entities will need to publish Modern Slavery Statements within six months from the end of their financial year.
A fact sheet on the Modern Slavery Report Requirement is available here.
Assistant Minister for Home Affairs, Alex Hawke said modern slavery “is a significant risk for Australian businesses as it undermines their competitiveness and can have substantial legal and reputational costs for businesses that fail to protect their supply chains.”
“This legislation sends a clear message that modern slavery will not be tolerated in our community or in the supply chains of our goods and services” he said.
Implications for employers – both over and under the reporting threshold
While there is some concern from Labor that the proposed legislation does not have enough “teeth”, the general premise of a Modern Slavery Act has bipartisan support, so employers are likely to see legislation in some form pass Parliament this year. Therefore, it may be prudent for employers to being taking action to prepare their businesses now.
For businesses over the reporting threshold, AMMA recommends as a starting point:
- Draft or update policy commitments, procedures and codes of conduct to ensure modern slavery issues are addressed, including procurement policies or supplier codes of conduct.
- Map your global suppliers and perform risk assessments to identify and prioritise salient modern slavery risks.
- Develop training for management staff, suppliers and other stakeholders.
- Consider processes for ongoing tracking and monitoring.
Entities that fall below the threshold may be asked by those they are supplying goods to services to provide evidence of their approach to tackling modern slavery. They may also be asked to comply with a ‘supplier code of conduct’ setting out minimum standards of behaviour they are expected to meet in terms of the modern slavery issues that form the basis of the reporting requirements.
Suppliers’ ability to meet these standards are likely to be taken into account when procurement decisions are made, so it is important for businesses falling under the reporting threshold to turn their minds to these issues.
Modern Slavery Bill introduced in NSW
In early May, the NSW upper house of Parliament passed the Modern Slavery Bill 2018, a private member’s bill introduced by the Hon. Paul Green, MLC, of the Christian Democratic Party.
The Bill differs from the proposed Federal in the types of matters that will be required to be reported on. It also provides for fines of up to $1.1 million for failure to prepare a modern slavery statement, make a modern slavey statement public or provide information which is false or materially misleading.
As it was introduced in the upper house, the Bill still needs to pass the lower house before it becomes law. NSW Parliament resumes sitting today (15 May).
AMMA is working with other industry groups to discern whether employers will be required to report under both the NSW and Commonwealth Acts, and report on different matters, and mitigate the risks if this is the case.
There is opportunity for further advocacy in this space. If it is an area of interest to your business, please contact AMMA’s policy team at [email protected] for further information and to express your views.