Combating Modern Slavery: Compliance Obligations and Beyond
Australia’s Modern Slavery Legislation
The Modern Slavery Act 2018 (Cth), which took effect on the 1st of January 2019 in Australia, introduced mandatory reporting requirements for larger companies to address modern slavery risks in their operations and supply chains. With references to the Australian Criminal Code and international conventions like the UN and ILO conventions, the legislation aims to promote supply chain transparency and due diligence to mitigate modern slavery risks. Entities with an annual consolidated revenue of at least $100 million AUD must report on the risks of modern slavery and the steps taken to mitigate them. This reporting process also require entities to submit a Modern Slavery Statement within six months after the end of their financial year for publication on an online register, addressing seven mandatory reporting criteria. While there is no template for the contents of the statement, organisations have the flexibility to include information demonstrating their risk management and procurement processes. The Act does not cover practices that only meet the threshold of being unlawful or harmful without elements of slavery, like substandard working conditions or wage underpayment. However, entities may choose to include disclosure regarding their compliance with labour and immigration laws when they report on their mitigation of modern slavery risks.
The Act was part of a broader effort by the Australian government to combat modern slavery and increase corporate transparency and accountability. A 2023 statutory review of the Act proposed significant amendments, including lowering the revenue threshold to $50 million AUD, introducing due diligence obligations, and imposing civil penalties for non-compliance. The review also suggested establishing a Commonwealth Anti-Slavery Commissioner.
Harmonising with its Commonwealth counterpart, the Modern Slavery Act 2018 (NSW) focuses on government bodies, local councils, and state-owned corporations in New South Wales. It imposes obligations to prevent modern slavery in public procurement processes and established the New South Wales Anti-Slavery Commissioner role to advocate against modern slavery in NSW. The Act aims to ensure businesses continuously review and improve their practices to mitigate modern slavery risks.
The Anti-Slavery Commissioner
The Commonwealth Anti-Slavery Commissioner, expected to be established, will raise awareness, engage with federal agencies, and guide future reforms to combat modern slavery. Businesses supplying to the Commonwealth Government should prepare for increased scrutiny regarding their modern slavery risk management practices. The responsibilities include assisting businesses in identifying and addressing modern slavery risks, promoting engagement with victims, and leading education and awareness campaigns. While the Commissioner will not have investigative or enforcement powers, future amendments may enhance their mandate. The new Commissioner is set to work closely with the New South Wales Anti-Slavery Commissioner.
Practical takeaways
Businesses are encouraged to pursue their passion for combating modern slavery, aligning their interests with their purpose. Pro bono work, along with private practice, can provide valuable experience and visibility, contributing to building capacity and expertise in addressing modern slavery issues within operations and supply chains.
If you enjoyed reading this blogpost, the topic of modern slavery legislation and its implications for businesses is explored further in the legal CPD Episode 131 featuring Eric Boone, Partner and Head of the ESG/Sustainability Division at Madison Marcus.