Modern Slavery

Back in January I talked about the Hidden in Plain Sight report which recommended the Australian Government introduce a Modern Slavery Act, similar to the United Kingdom Act introduced in 2015.

Since then, we have seen the NSW Government pass the Modern Slavery Act 2018 (NSW) into law, and now the Commonwealth Act has been introduced into parliament. Given these developments I provide an update to my original article, particularly noting the differences between the recommendations in the Hidden in Plain Sight report and the legislation introduced.

Modern Slavery – a recap

Slavery is officially banned by all countries, yet despite this, there are more slaves in the world than ever before. It is estimated there are over 40 million people trapped in slavery – people paid no money, locked away and controlled by violence.

Today ‘modern slavery’ describes a range of exploitative practices including slavery, servitude, forced labour, child labour, forced marriage, bonded labour and other slavery-like practices.

It is estimated there are more than 4,000 victims of modern slavery in Australia, with most reported cases involving forced labour. However, the impact of modern slavery in Australia is far-reaching, through exposure to modern slavery risks in our supply chains.

A Modern Slavery Act for Australia

Australia already has a number of measures in place to combat modern slavery, including the offences outlined in Divisions 270 and 271 of the Criminal Code Act 1995. The aim of the Modern Slavery Act is to consolidate those measures, add to them, and shine a light on an otherwise hidden crime and bring it out of the shadows of public consciousness.

Impact on businesses operating in Australia

One of the most significant changes introduced by the NSW legislation and the proposed Commonwealth Act is mandatory supply chain reporting for affected entities. The primary objective of those measures is to [1]:

“… assist the business community in Australia to take proactive and effective actions to address modern slavery. This will help mitigate the risk of modern slavery practices occurring in the supply chains of goods and services in the Australian market.”

Summary of Key Reporting Provisions

MEASURETHE MODERN SLAVERY BILL (CTH)
Who is affected:Entities with total revenue of at least $100M for the reporting period.
Reporting requirement:Annual modern slavery statements to be provided within six (6) months of the end of financial year.
Report approval:Modern slavery statements to be approved at the equivalent of board level and signed by a director equivalent.
Content of modern slavery statement:Statement must cover mandatory criteria.
Publication of statement:Statements will be published on an online, freely accessible, Modern Slavery Statements Register.

The proposed central registry is a welcome development and is expected to facilitate improved compliance.
Penalties for non-compliance:None
Oversight:Business Engagement Unit

There are a few differences between the recommendations in the Hidden in Plain Sight report and the NSW and Commonwealth legislation, which warrant further comment.

Reporting threshold

The Hidden in Plain Sight report recommended a threshold of $50m, which has been adopted in the NSW legislation. The increased threshold in the Commonwealth Bill means about 3000 large entities will be required to report, although other entities can voluntarily opt-in.

Penalties

Controversially, the Government has not adopted the report’s recommendations for penalties and compliance measures for entities that fail to report. Instead, the Commonwealth Bill relies on a “race to the top” as companies compete for market funding and consumer support.

Oversight

The Commonwealth Bill falls short by not appointing an Independent Anti-Slavery Commissioner like we see in the UK (and included in the NSW legislation).

What now?

On 28 June the Senate referred the Modern Slavery Bill 2018 to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 24 August 2018.

Individuals and organisations have until 20 July 2018 to make a submission to the inquiry on the proposed reporting requirement. There are some areas that warrant further discussion, namely:

  • the $100m threshold;
  • no penalties for non-compliance;
  • no Independent Anti-Slavery Commissioner.

Further details about the submission process can be found here.

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