06 December 2018
On 28 November 2018, the Modern Slavery Bill 2018 (Commonwealth Bill) was passed by Federal Parliament.
While the Commonwealth Bill requires organisations to take a range of steps from a compliance perspective, it also provides an opportunity for organisations more broadly to consider their approach to—and structures and processes for—identifying and minimising the risks of slavery and labour exploitation within their supply chains.
The reporting requirements under the Commonwealth Bill will commence within six months of it receiving assent by the Governor-General and becoming an Act of Parliament. This is anticipated to occur by the end of 2018.
The Commonwealth Bill requires the following entities with revenue over $100 million per financial year to provide a ‘modern slavery statement’ to the Minister for Home Affairs (Minister) within six months of the end of each financial year:
The Minister will maintain an online, public register of these statements.
The Commonwealth Bill requires that the modern slavery statement describe:
The statement must be approved by the principal governing body of the entity (i.e. a company’s board of directors) and signed by a responsible member of the entity.
A ‘joint modern slavery statement’ may be prepared that reports on a number of entities.
Approval for the joint modern slavery statement must be given by the principal governing body of either:
Under the Commonwealth Bill, the Minister may request an explanation for an entity’s failure to provide a modern slavery statement and/or request that the entity undertake remedial action, including to provide a modern slavery statement.
If the Minister’s request is not complied with, the Minister may publish information about the non-complying entity on the Modern Slavery Statements Register, or in any other way considered appropriate.
By contrast, the Modern Slavery Act 2018 (NSW Act), which passed through NSW Parliament earlier this year, contains a $1.1 million penalty provision for various non-compliance. This creates the striking situation where entities covered by the NSW Act, but not the Commonwealth Bill (i.e. those with a NSW presence and a turnover between $50m and $100m) are subject to penalties, but entities with a turnover of $100m or more are not.
Commercial organisations should start preparing now to ensure they comply with the new requirements.
Further, while the due diligence required to enable accurate and reliable reporting in a modern slavery statement will identify potential or actual modern slavery risks, businesses will be required to assess, prevent and mitigate identified exploitative activities and ensure grievance mechanisms and access to remedy is in place.
It is expected that most businesses who will be affected by the Act will find modern slavery in their supply chains. Addressing these potential and actual adverse impacts is the pressing challenge.
In order to address this, the following steps should be considered:
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.