AICD submission on recommendations to strengthen Australia’s modern slavery laws

Whilst the AICD sees merit in a new high-risk declaration mechanism, we are unconvinced that introducing a new and complex due diligence obligation is desirable at this time.

We do 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. Currently, the low reporting threshold of $100m of revenue, captures around 3000 entities, many of whom will have limited understanding of modern slavery risks. Government focus should be on helping organisations to combat slavery where the risks are greatest.

The key points in our submission were:

• The AICD opposes a new and complex mandatory due diligence obligation, especially given the proposed reporting threshold ($100m revenue). Significant time and resources are already spent on complying with the regime, with many reporting entities struggling to meet their existing obligations.  

• Other considerations in opposing the obligation include:

  • existing barriers to undertaking the requisite due diligence on organisations’ operations and supply chains;

  • the growing volume of federal regulation which has contributed to the approximately $160bn compliance burden faced by Australian organisations (both commercial and NFP);  and

  • a new due diligence obligation would go beyond the approach currently taken in many comparable jurisdictions. In the few jurisdictions where such an obligation exists, there have been much higher applicable thresholds than is contemplated in Australia.

• The due diligence process outlined in the Position Paper is a complex, multi-step process, that may be beyond the existing capabilities of most reporting entities. The AICD recommends that, instead of introducing a mandatory due diligence obligation, the Government and the Commissioner focus on developing detailed guidance on suggested due diligence processes to assist entities.

• The AICD supports a mechanism for the Commissioner to declare that a product, service or industry carries a high risk of modern slavery and considers that the Commissioner is uniquely placed to play a pivotal leadership role in driving improved compliance with the Act.

• There should be no new statutory obligations on reporting entities linked to the Commissioner declarations given the extent of existing obligations, and the risk that such powers create a rolling set of new requirements.

• Targeted guidance should be developed for each declaration, to ensure that declarations reduce, rather than increase, the regulatory burden for reporting entities, and support the identified risks being effectively managed.