Modern Slavery Act: What businesses in Australia need to know

Note: 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.

On 1 January 2019, the Modern Slavery Act 2018 (Cth) (Commonwealth Act) commenced, heralding a new statutory modern slavery reporting requirement for larger companies operating in Australia. 

Who needs to report?

Entities will need to report under the Commonwealth Act if they are an Australian entity or carry on business in Australia with a minimum annual consolidated revenue of $100 million. 

The Modern Slavery Act 2018 (NSW) (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 New South Wales Government will await these recommendations before progressing its response to modern slavery.

What does reporting entail?

Reporting obligations relate to the risk of modern slavery in the operations and supply chain of a reporting entity (and its owned and controlled entities), as well as the steps it has taken to respond to the risks identified. 

Unlike other jurisdictions, the reporting criteria in Australia are mandatory.  Reporting entities must have a reasonable basis for any opinions expressed in their Modern Slavery statement, so it is important that reporting entities take the time to assess their risk.  The reporting criteria can be found here.

What should entities do?

It is crucial that reporting entities begin reviewing their supply chains and operations to comply with the new reporting obligations.

What is the timing? 

A modern slavery statement must be submitted within six months after the end of the reporting entity’s financial year.  The reporting period is the entity’s first full financial year that commences after 1 January 2019. 

Lodgment and publication

Reporting entities must provide their approved modern slavery act statement to the Australian Border Force for publication on an on-line public register.

Human right due diligence: 2018 report and analysis

In 2018, Norton Rose Fulbright and the British Institute of International and Comparative Law  released 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.