AICD submission on Attorney General consultation on the Modern Slavery Act 2018 (Cth)

The AICD believes that a further, formal consultation process is required to consider a new due diligence obligation and consequent enforcement regime. A considered and public consultation with an accompanying detailed discussion paper is critical to support robust policy deliberations.

The AICD does not support a policy approach that continually seeks to layer new and complex obligations on organisations, when it is well known that combatting modern slavery requires tackling global human rights issues, and global governmental cooperation.  More broadly, the AICD has called for a more fundamental rethink of the reporting regime – away from broad-based reporting and towards a targeted, high-risk sector approach.

The key points in our submission were:

• The AICD opposes any due diligence steps being mandated by the Act, especially given the Commissioner has stated his view that the threshold should be set at $100m revenue (consistent with the current reporting threshold). Significant time and resources are already spent on complying with the regime, with many reporting entities struggling to meet their existing obligations.

• The AICD supports reporting on the existence of grievance mechanisms, limited to an entity’s process. This additional reporting criteria should be supported by guidance to help entities establish or integrate mechanisms into existing frameworks (e.g. whistleblowing policies).

• The AICD does not believe that entities should be required to demonstrate compliance with the Act through new additional requirements to retain documentation or through the ability of government to require an independent audit, neither of which were recommendations of the McMillan review.

• While the AICD supports a high-risk declaration mechanism, there should be no new statutory obligations on reporting entities linked to the Commissioner’s declarations given the extent of existing obligations, and the risk that such powers create a rolling set of new requirements for entities to track and implement. Targeted guidance should be developed for each declaration. 

• The AICD supports the introduction of enforceable undertakings (preferred over infringement notices in terms of efficacy) for breaches of existing reporting obligations under the Act.

• The AICD also in-principle supports the introduction of civil penalties for (a) failure to submit a statement; (b) providing false or misleading information; and (c) failure to comply with remedial requests. Civil penalties should be subject to a ‘reasonable steps’ defence for diligent entities and a ‘mistake of fact’ defence to protect against inadvertent non-compliance. Penalty units should also reflect the severity of the breach and align with comparable corporate reporting frameworks to ensure fairness and credibility.