What is the Modern Slavery Act 2018 (Cth)?

The Australian Modern Slavery Act 2018 (Cth) (Act) entered into force on 1 January 2019, which established a national Modern Slavery Reporting Requirement (Reporting Requirement) throughout the country.  The Reporting Requirement applies to businesses and entities with annual consolidated revenue of AUD$100 million or more.  The purpose of the Reporting Requirement is to support the Australian business community in addressing and identifying modern slavery risks, as well as maintaining transparent and responsible supply chains.

So just what is modern slavery?

Modern slavery is a term used to describe serious exploitation, which may occur in every industry and sector and has severe consequences for victims. As defined in section 4 of the Act, the following conducts constitute modern slavery:

• human trafficking;
• slavery;
• servitude;
• forced labour;
• debt bondage;
• forced marriage; and
• the worst forms of child labour.

What responsibilities do businesses have to respect human rights in their operations?

Modern slavery in business practices distorts global markets and undermines responsible business, leading to legal and reputational consequences for entities.  The United Nations Guiding principles on Business and Human Rights provides a framework for businesses and includes guidelines as to how to take steps to asses and address the risks associated with modern slavery.

Modern Slavery Act 2018

Section 3 of the Act requires entities based or operating in Australia, with an annual consolidated revenue of at least AUD$100 million to file an annual report on the risks of modern slavery in their operations and supply chains, as well as on the actions taken in addressing these risks.

Entities that do not meet the threshold of AUD$100 million for mandatory reporting may volunteer to report under section 6 of the Act. Modern slavery statements must be given annually to the Minister.  If an entity fails to comply with its obligations under the Act, the Minister has power to request explanation as to why did it failed to comply with the reporting requirements set out in the Act.

Contents of the modern slavery statements

A modern slavery statement must contain the following pursuant to section 6 of the Act:

• identifying the reporting entity;
• describing the structure, operations and supply chains of the reporting entity;
• describing risks if modern slavery practices in the operations and supply chains of the entity;
• describing the actions taken to assess and address these risks, including due diligence and remediation processes;
• describing how the entity assesses the effectiveness of actions taken;
• describing the process of consultation with entities controlled or owned by the reporting entity;
• including any information that may be relevant to the reporting entity; and
• the report must contain the details of approval by the principal governing body of the entity.

How to submit a modern slavery statement

Entities with a mandatory reporting obligation or intending to voluntarily make a statement can upload their statements to the Australian Government’s Online Register for Modern Slavery Statements.  The statements are assessed and reviewed by the ABF, which may result in requiring the entities to revise non-compliant statements.

Modern slavery statements are registered by the Minister in the Online Register for Modern Slavery Statements and the register is made available to the public on the internet pursuant to section 17 of the Act.

Takeaways

Filing a modern slavery statement is only compulsory for entities with  an AUS$100 million annual consolidated revenue.  Businesses with lower annual consolidated revenue may file a statement voluntarily.  Whether an entity should opt in so to speak should be assessed on a case by case basis as the burden in compiling and filing a statement may not be practically viable.

Links and further references

Legislation

United Nations Guiding principles on Business and Human Rights

Modern Slavery Act 2018 (Cth)

Further information about compliance with the Modern Slavery Act

If you are an Australian organisation and need advice on compliance with the reporting requirements of the Modern Slavery Act 2018 (Cth), contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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