Australian Modern Slavery Act - Is Your Business Ready?

The Australian Parliament passed the Act on 29 November 2018 and the reporting requirement entered into force on 1 January 2019.

What is modern slavery? The term modern slavery is used to describe situations where coercion, threats or deception are used to exploit victims and undermine or deprive them of their freedom.

The behaviours and practices which constitute modern slavery are serious human rights violations.

Modern slavery can be found in every corner of our globalised world. The Global Slavery Index 2018 estimates 15,000 people are living in conditions of modern slavery in Australia.

The Australian Modern Slavery Act 2018 

The Act defines modern slavery as including eight types of serious exploitation: trafficking in persons, slavery, servitude, forced marriage, forced labour, debt bondage, deceptive recruiting for labour or services, the worst forms of child labour. (The worst forms of child labour means situations where children are subjected to slavery or similar practices, or engaged in hazardous work).

The Australian Parliament passed the Act on 29 November 2018 and the reporting requirement entered into force on 1 January 2019.

Modern Slavery Act 2018 (NSW)

NSW passed and assented to the Modern Slavery Act 2018 (NSW) in June 2018. It was anticipated that the NSW Act would commence by 1 July 2019. However, no commencement date has to-date been proclaimed, and as a result, the NSW Act has yet to commence operation.

The NSW Act requires commercial organisations with an annual turnover of $50 million or more to produce a Modern Slavery Statement on the incidence of modern slavery in their supply chains.
 

The reporting requirement aims to support the Australian business community to identify and address their modern slavery risks and maintain responsible and transparent supply chains.

Under the reporting requirement, large entities with over AU$100 million annual consolidated revenue must publish annual Modern Slavery Statements (statements) on an online, central register. Other entities based, or operating, in Australia may report voluntarily.

These statements must explain what the entity is doing to assess and address modern slavery risks in its global operations and supply chains.

Boards are now held directly accountable for modern slavery risks in Australia and overseas, under the act. Statements must be approved by the principal governing body of the reporting entity and signed by a member of that body. For companies, this means statements must be approved by the board and signed by a director.

If you are required to report under the Modern Slavery Act, you will need to start reporting for your organisation’s first financial year that commences after 1 January 2019. For example, an entity operating on an Australian financial year will need to report on the period from 1 July 2019 to 30 June 2020 (with the first report due by 31 December 2020).

The Modern Slavery Act does not impose a financial or other penalty for non-compliance, however, under the Act, the Government has the power to publicly name entities that fail to comply with the reporting requirement.

Failure to comply may also significantly damage your entity’s reputation, undermine your ability to do business, and damage investor confidence.

“The global trends are clear: regulators, investors, consumers and employees are all demanding better corporate reporting on human rights. The introduction of the Australian Modern Slavery Act will change the conversation here and bring human rights into the corporate mainstream.”

Richard Boele, Partner, National Leader, KPMG Banarra Human Rights and Social Impact Services Head of KPMG’s Global Business and Human Rights Network
 

In the article Modern slavery laws: how boards must comply published by the Australian Institute of Company Directors Roger Burritt, Honorary Professor, Fenner School of Environment and Society, College of Science, ANU, remarks that businesses, led by their boards, will need to do some or all of the following:

• Produce the first yearly federal modern slavery statement from 2020
• Review existing company policies on modern slavery in operations and supply chains
• Appoint a senior internal person to take ownership and responsibility for compliance
• Provide training to employees on modern slavery risk
• Conduct an audit or due diligence on local and global supply chains
• Take steps to address any risks or potential modern slavery risks identified
• Set up a process to measure effectiveness through performance monitoring

“Boards need to turn their minds to modern slavery and to understand this is now a core-business risk that they must address.”

Dr Meg Brodie Director and Human Rights Service Line Lead, KPMG Banarra Human Rights & Social Impact Services Manager of KPMG’s Global Business & Human Rights Network
 

New online modern slavery training course

To assist companies with training employees on modern slavery risk, Allara Learning has developed a new online course Modern Slavery Act Australia - Awareness Training. This is a general training course for all employees on how to understand, identify and report modern slavery in and around the workplace. The course has been developed in partnership with global law firm Norton Rose Fulbright Australia.