Modern Slavery Act: What businesses in Australia need to know

Authors:

Publication | August 2019

On 1 January 2019, the Modern Slavery Act 2018 (Cth) commenced, 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 to comply with the new reporting obligations. For Australian corporations, the first reporting year will be 1 July 2019-30 June 2020 with the reports due by 31 December 2020. Entities with an international financial year may have to report earlier, depending upon the timing of their end of financial year. For example, entities with a 31 March 2020 end of financial year will need to report by 30 September 2020. The reports will be published on a public register.

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.

Modern slavery therefore encompasses 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 under the Commonwealth Act if they carry on business in Australia with a minimum annual consolidated revenue of $100 million. Corporate groups should obtain specific advice in relation to which entities are required to report and how joint reporting can work.

The NSW Act is not yet in force and is currently subject to Parliamentary review. On 6 August 2019, the Legislative Council Standing Committee on Social Issues announced an inquiry into the NSW Act. The Committee's recommendations are due on 14 February 2020. The NSW Government will await these recommendations before progressing its response to modern slavery.

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.

As at September 2017, the Walk Free Foundation’s Global Slavery Index 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;
30,435,300 people in Asia-Pacific Region are 'enslaved' (66.4 per cent of all people enslaved); and
4,300 people in Australia are enslaved.

Human right due diligence: 2018 report and analysis

Norton Rose Fulbright and the British Institute of International and Comparative Law 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.