On 29 November 2018, the Modern Slavery Bill 2018 (Cth) (Bill) was passed in the House of Representatives, heralding a new statutory modern slavery reporting requirement for larger companies operating in Australia. Reporting obligations relate to the steps taken to respond to the risk of modern slavery in the operations and supply chains of the reporting entity and its controlled entities. Unlike other jurisdictions, the reporting criteria are mandatory.
It is crucial that reporting entities begin reviewing their supply chains and collecting data ahead of the introduction of reporting obligations. For Australian corporations, we anticipate that the first reporting year will be 1 July 2019-30 June 2020. Entities with an international financial year may have to report earlier, depending upon the timing of their end of financial year and the timing of royal assent to the Bill.
At its broadest, the term 'modern slavery' refers to any situations of exploitation where a person cannot refuse or leave work because of threats, violence, coercion, abuse of power or deception. The Australian regime defines modern slavery to incorporate conduct that would constitute an offence under existing human trafficking, slavery and slavery-like offence provisions set out in Divisions 270 and 271 of the Commonwealth Criminal Code.
This will mean modern slavery will encompass slavery, servitude, the worst forms of child labour, forced labour, human trafficking, debt bondage, slavery like practices, forced marriage and deceptive recruiting for labour or services.
Entities will need to report if they carry on business in Australia with a minimum annual consolidated revenue of $100 million. Entities in New South Wales will be obliged to report under the NSW Act if they have a turnover of $50 million. Corporate groups should obtain specific advice in relation to which entities are required to report and how joint reporting can work.
Once the Modern Slavery Act (Cth) commences, a targeted regulatory regime will be introduced, under which large businesses will report annually in relation to their actions to address modern slavery against a set of minimum criteria. Those reports will be published on a public register. For more detailed information on the new regime, read our article: Commonwealth Modern Slavery Bill passes through both houses of Parliament.
What are the statistics?
Many Australian businesses may be unaware of the risk that they have slavery in their business or supply chains. Statistically, the incidence of modern slavery within Australia appears to be relatively low, but the concern is that the statistics reflect a low level of awareness of the issues, and the actual incidence may be much higher, both domestically and overseas.
The Walk Free Foundation’s Global Slavery Index 2018 estimates:
- in excess of 40 million people globally are subject to some form of modern slavery and collectively approximately US$150 billion per year is generated in the global private economy from forced labour alone;
- 24,990,000 people in the Asia-Pacific Region are 'enslaved' (62 per cent of all people enslaved); and
- 15,000 people in Australia are enslaved.
Human rights due diligence: 2018 report and analysis
Norton Rose Fulbright and the British Institute of International and Comparative Law (BIICL) recently announced the launch of the results of our human rights due diligence (HRDD) in supply chains project and published a report entitled ‘Making sense of managing human rights issues in supply chains’.
Supply chain HRDD is best understood as an ongoing, dynamic and context-specific process which is depicted in the diagram forming the central point of our report.
The report provides a comprehensive overview of the legal and regulatory framework relevant to the management of human rights issues in supply chains, discusses the components of human rights due diligence in supply chains and sets out observations of current practice and best practice recommendations. Access the report along with a summary of the findings here.
NRF Transform | Risk Sonar
To assist organisations in preparation for the new regime we have developed the NRF Transform | Risk Sonar, a secure and cost-effective technological solution that helps organisations identify risk in their supply chains, with an initial focus on human rights, and comply with statutory reporting requirements. Follow the link to find out more.
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