After much anticipation, the Department of Home Affairs has now released Draft Guidance for Reporting Entities in relation to the statements required under the new Modern Slavery Act 2018.

The guidance aims to clearly explain what entities need to do to prepare and lodge Modern Slavery Statements that comply with legislative requirements.

There are seven mandatory criteria employers are required to have in every statement:

1. identify the reporting entity
2. describe the reporting entity’s structure, operations and supply chains
3. describe the risks of modern slavery practices in the operations and supply chains of the reporting entity and any entities it owns or controls
4. describe the actions taken by the reporting entity and any entities it owns or controls to assess and address these risks, including due diligence and remediation processes
5. describe how the reporting entity assesses the effectiveness of these actions
6. describe the process of consultation with any entities the reporting entity owns or controls (a joint statement must also describe consultation with the entity giving the statement)
7. any other relevant information

The Modern Slavery Statements will be published on a public website under the auspices of the Minister for Home Affairs. The first reporting year for reporting entities whose financial year begins 1 July ends 30 June 2020 and Modern Slavery Statements must be lodged by 31 December 2020.

Recap: What is the “Modern Slavery Act?”

The federal Modern Slavery Act 2018 came into effect on 1 January 2019. The Act requires reporting entities, which are entities based or operating in Australia with a consolidated annual revenue of AU$100 million or more, to lodge an annual Modern Slavery Statement on:

• the risks of modern slavery in their operations and supply chains
• the actions the entity has taken to address those risks; and
• the entity’s evaluation of their effectiveness

The aim of reporting requirements is to support the Australian business community to identify and address modern slavery risks in their operations or supply chains and to maintain responsible and transparent supply chains.

Implications for employers

While some AREEA members may have previously completed similar reporting for procurement or contract activities, for many AREEA members, this transparency reporting will be a new activity.

For this reason the Department of Home Affairs is working to support employers to implement and comply with the requirements, taking a non-punitive approach to enforcing the legislation.

The Act does not impose penalties on companies for failing to lodge a statement or lodging an incomplete statement, however the government has the power to publicly name companies that fail to comply in certain circumstances.

The implications for failing to lodge a statement include:

• significant damage to your company’s reputation
• undermine your company’s ability to do business with other entities
• damage investor confidence

For those AREEA members who have previously lodged Modern Slavery Statements as part of their procurement and contracts activities, we would be interested to see how you prepare these statements. 

AREEA will engage with the Department to develop industry-specific case studies and guidance materials for the resources and energy industry. If you or your company are interested in being involved in developing these materials or have prepared these statements previously, please contact [email protected].