The Modern Slavery Bill 2018 (Cth) (Commonwealth Bill) was introduced into the House of Representatives on 28th June 2018 and has been referred to the Senate Legal and Constitutional Affairs Legislation Committee for report by 24 August 2018. The Bill if passed, will introduce a modern slavery reporting requirement (extending to an entity’s supply chains) designed to strengthen Australia’s response to modern slavery. This comes shortly after New South Wales passed its own modern slavery legislation – the Modern Slavery Act 2018 (NSW) (NSW Act).
To whom does it apply?
|Commonwealth Bill||NSW Act|
|Which entities||All entities (including not-for-profit entities and foreign entities carrying on business in Australia).||Entities with NSW employees that are commercial organisations (entities that are supplying goods or services for profit or gain).|
|Applicable threshold||At least $100 million consolidated revenue a year.||At least $50 million in turnover per entity a year (or as per regulations).|
What is required?
|Commonwealth Bill||NSW Act|
|Information required in the annual modern slavery statement||
An Ashurst Employment Alert found:
|Similar to the Commonwealth Bill, to be finalised in regulations.|
|Penalties for non-compliance||None.||10,000 penalty units (currently $1,100,000).|
|Availability of modern slavery statements||Approval required by the principal governing body of the entity and signed by a responsible member of the entity. For a company, this means approval by the board of directors and signed by an individual director, Ashurst said.||No specific requirements noted.|
|Commencement dates||Different dates apply for different parts of the Bill. The reporting requirement will apply the earlier of a day to be fixed by proclamation or the day after six months from Royal Assent.||Assented on 27 June 2018, with commencement to be determined by proclamation.|
|Exemptions||None at this stage.||Where the entity is subject to obligations under a law of the Commonwealth or another State or Territory that is prescribed as a corresponding law (intended to prevent duplication).|
What is modern slavery?
Modern slavery is used to describe a number of crimes, including human trafficking, forced labour, sexual slavery, child labour and trafficking, domestic servitude, forced marriage, bonded labour (including debt bondage), slavery and other slavery-like practices.
It is estimated that worldwide there are 46 million victims of modern slavery and that modern slavery in supply chains amounts to $150 billion USD of illicit profits a year, the World Economic Forum has found. The Global Slavery Index suggests that two-thirds of modern slavery occurs in the Asia-Pacific region, where many Australian supply chains extend.
Last year, Andrew Forrest, chairman of Fortescue Mining Group and Walk Free Foundation was quoted as saying:
“We are all going to have slavery in our supply chains no matter how good we think our corporate social responsibility is,” Forrest said according to the Sydney Morning Herald.
What your organisations need to do
According to an Ashurst Employment Alert, organisations should consider whether they will be covered by the Commonwealth Bill, and if not, whether they may be covered by the NSW Act, noting that companies with NSW employees will be caught.
Ashurst said organisations will need to consider what steps need to be taken to comply. Such steps could include:
- reviewing existing company policies on anti-slavery
- conducting an audit or due diligence on suppliers and supply contractors
- taking steps determined necessary to address any risks or potential risks identified
- determining a process to assess effectiveness.
As part of the steps taken, board processes should be updated to address the compliance obligations under the new regime.
If your organisation is captured by the Australian requirements and is already complying with a similar requirement overseas (such as the US or UK), this should be reviewed to determine if it meets the new Australian requirements.
Australia’s international legal obligations require Australia to respond effectively to human trafficking, slavery and slavery like practices. Under the United Nations Sustainable Development Goal 8.7 Australia has committed to take immediate and effective measures to end modern slavery by 2030. Government intervention is consistent with the UN Guiding Principles on Business and Human Rights, and although these are not legally binding on Australia, Australia supports them and encourages businesses to apply them in their operations (Australian Government action in this area is consistent with international best practice). Foreign jurisdictions that have taken regulatory action regarding modern slavery and other human rights abuses in supply chains include the United Kingdom, United States, France, the Netherlands and the European Union. The Australian requirements have been modelled on the UK requirements which were introduced in 2015 and already apply to Australian companies or partnerships carrying on business in the UK and meeting a prescribed revenue threshold. Key differences between the UK and the Australian regime include:
- The Australian regime ‘requires’ certain content to be included in the statements, rather than a list of optional content (as in the UK); and
- The Commonwealth Bill proposes a freely accessible online public register, rather than a specific requirement to publish the statement on the entity website.
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