“Modern Slavery” legislation – Coming in 2018

Photo of documents in binders

The Federal Government has decided to legislate to require businesses and other organisations with a large annual turnover to lodge “modern slavery statements” and have these published on a public website run by the Government or a NGO. The threshold turnover amount is yet to be finalised (turnover of $100 million has been proposed). The reporting requirement will require large corporations and entities operating in Australia to report annually on their actions to address modern slavery in their operations and supply chains.

The Government’s discussion paper includes a provisional definition of modern slavery as ‘conduct that would constitute a relevant offence under the existing human trafficking, slavery and slavery-like offence provisions in the Commonwealth Criminal Code (i.e. slavery, servitude, forced labour, debt bondage and deceptive recruiting for labour or services).

The proposed modern slavery statement reporting areas are substantially the same criteria set by the current UK reporting requirements and will include information about:

  1. The entity’s structure, its operations and its supply chains
  2. The modern slavery risks present in the entity’s operations and supply chains
  3. The entity’s policies and process to address modern slavery in its operations and supply chains and their effectiveness (such as codes of conduct, supplier contract terms and training for staff), and
  4. The entity’s due diligence processes relating to modern slavery in its operations and supply chains and their effectiveness.

The Government’s consultation paper states that it does not create a due diligence regime nor requires entities to certify their supply chains are slavery-free. The legislation is expected however, to impact customer expectations from suppliers. Customers may expect them to be able to demonstrate that they are not engaging in, or benefitting from, modern slavery, for example, to show how they know about their inputs or to demonstrate the integrity of their own operations.

While the Government is continuing its consultation about the final form of this legislation, it is increasingly clear that the reporting requirement will impact all suppliers many of whom will be small to medium sized businesses.

The intent of the legislation is to encourage a “race to the top” and

  • encourage business to show how it addresses modern slavery risks;
  • improve business awareness of this issue and provide consistency and certainty for business about Government’s expectations on eliminating modern slavery;
  • improve information available to consumers and investors to help them to make more informed decisions;
  • making the issue of taking action on modern slavery a reputational risk for business.

We will keep members informed as the Government moves to finalise this legislation, which is expected to be introduced in the June – August Parliamentary session.