Modern slavery legislation in Australia
September 20, 2018
Modern slavery is a global issue. The Global Slavery Index 2018 indicated that in 2016, there were 15,000 people living in conditions of modern slavery in Australia on any given day. In a modern legal context, the concept of modern slavery broadly includes slavery, servitude or forced labour, and situations of debt bondage, violence, coercion, threats, trafficking and the worst forms of child labour.
The issue of modern slavery has recently been considered by both State and Commonwealth governments in Australia. The NSW Parliament passed the Modern Slavery Act 2018 (NSW Act) on 27 June 2018 (no date has yet been set for its proclamation) and the Modern Slavery Bill 2018 (Commonwealth Bill) was presented and read in the Australian Parliament for the first time on 28 June 2018. Both propose mandatory reporting requirements on certain entities to report on the risks of modern slavery in their business and supply chains.
The NSW Act will require commercial organisations (including companies, partnerships, associations or other bodies) to comply with mandatory reporting requirements if the organisation:
- employs employees in NSW
- supplies goods and services for profit or gain, and
- has an annual turnover of at least $50 million (or any other amount prescribed by the regulations) in any financial year.
Organisations which are not bound to comply with the mandatory reporting requirements in the NSW Act may choose to comply with the reporting requirements on a voluntary basis.
Organisations which are bound by the mandatory reporting requirements will be required to prepare and make publicly available an annual modern slavery statement which complies with the regulations under the NSW Act. While these regulations are yet to be finalised, the NSW Act contemplates that they may require a modern slavery statement to include information about:
- the organisation’s structure, its business and its supply chains
- the due diligence processes undertaken by the organisation to ensure it is aware of modern slavery risks in its business and supply chains
- those aspects of the organisation’s business and supply chains in which there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk, and
- training on modern slavery matters which it has made available to its employees.
If an organisation which is required to comply with the NSW Act fails to prepare or publish its annual modern slavery statement, or provides false or misleading information in connection that statement, that organisation may be fined up to $1.1 million.
The NSW Act also proposes to establish the office of the Anti-slavery Commissioner, whose functions will include making recommendations and providing information, advice, education and training about action to prevent, detect, investigate and prosecute offences involving modern slavery. The Commissioner will also be required to maintain a public register of any organisation which has disclosed in a modern slavery statement that its goods and services are, or may be, a product of supply chains in which modern slavery may be occurring, and the steps taken by that organisation to address that concern.
While the concept of ‘commercial organisation’ under the NSW Act does not include a government agency (which is therefore not bound by the obligation to prepare annual modern slavery statements), the NSW Act is stated to bind the Crown. Further, as one of the objects of the NSW Act is to provide for mandatory reporting of risks of modern slavery occurring in the supply chains of NSW government agencies, it also proposes to amend the Public Works and Procurement Act 1912 (NSW) to include an obligation on a government agency to take reasonable steps to ensure goods and services procured by and for that agency are not the product of modern slavery.
The NSW Act will also permit:
- (by way of proposed amendments to the Public Finance and Audit Act 1983 (NSW)), the Auditor-General to conduct an audit of government agencies to assess whether they are meeting their procurement obligations in compliance with the requirements of the NSW Act, and
- the Commissioner to identify on the public register any NSW Government agency that fails to meet its procurement obligations.
The Commonwealth Bill proposes to impose similar reporting requirements to those specified in the NSW Act on the Commonwealth itself, as well as Australian companies, incorporated partnerships and certain trusts and other entities, if the entity is an Australian entity or carries on business in Australia, and has a consolidated revenue of at least $100 million for the financial year or other relevant reporting period.
Under the Commonwealth Bill, reporting entities must prepare an annual modern slavery statement (in a form required by the Commonwealth Bill) and provide a copy to the Minister within six months after the end of each financial year. This statement must be approved by the entity’s principal governing body; for a corporate entity, the principal governing body would be the Board of directors of that entity. The Minister must also prepare a modern slavery statement for the Commonwealth for a reporting period, covering all non-corporate Commonwealth entities within the meaning of the Public Governance, Performance and Accountability Act 2013 (Cth).
The Commonwealth Bill requires that modern slavery statements must specify, for each reporting entity covered by the statement:
- the identity of the reporting entity, its structure, operations and supply chains
- the risks of modern slavery practices in the entity’s operations and supply chains (including in controlled entities)
- any actions taken by the reporting entity (and its controlled entities) to assess and address those risks, including due diligence and remediation processes, and
- the effectiveness of any actions taken.
The Minister is required to maintain a register of modern slavery statements, which are to be freely available for public inspection.
The key difference between the Commonwealth Bill and the NSW Act is that the Commonwealth Bill does not currently propose to introduce penalties on reporting entities for non-compliance with reporting requirements under the Commonwealth Bill.
Interplay between the NSW Act and the Commonwealth Bill
It is important to note that the NSW Act states that the requirements for organisations to prepare modern slavery statements do not apply to any entity that has obligations under a corresponding Commonwealth law, so entities which would otherwise be caught by both the NSW Act and the Commonwealth Bill (upon the introduction of Commonwealth law and assuming the Commonwealth Bill is passed) will not be required to prepare modern slavery statements under each law.
While the NSW Act has not yet come into effect, any entities which will be required to comply with its provisions should start taking action now to ensure they are well placed to comply with the new reporting requirements as soon as the law is proclaimed.
Further information / assistance regarding the issues raised in this article is available from the author, Tina van Epen, Partner or your usual contact at Moray & Agnew.
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