Financial services providers and the Modern Slavery Bill

The Modern Slavery Bill 2018 was introduced into the House of Representatives on 28 June 2018.

The Explanatory Memorandum for the Modern Slavery Bill 2018 (Cth) states that:

The Bill will support large businesses to identify and address modern slavery risks and to develop and maintain responsible and transparent supply chains. It will drive a ‘race to the top’ as reporting entities compete for market funding and investor and consumer support. The Bill also aims to increase awareness of modern slavery risks among the Australian business community, and assist investors and consumers to make more informed decisions when using, buying and selling goods and services.

If passed, the Bill will require reporting entities to submit annual ‘modern slavery statements’ to the responsible Minister within six months after the end of the reporting entity’s financial year.

The Minister must maintain a register of modern slavery statements, to be known as the Modern Slavery Statements Register. The register must be made available for public inspection, without charge, on the internet.

Although there is no obligation to do so, it will be appropriate for business lenders to check the register for compliance by borrowers.

If a financial service provider is a reporting entity it will be obliged to submit its own annual ‘modern slavery statement’.

What is ‘modern slavery’?
Modern slavery will include slavery, servitude, forced labour, deceptive recruiting for labour or services, forced marriage, debt bondage, trafficking in persons and the worst forms of child labour.

What is a reporting entity?
Australian entities and entities carrying on business in Australia with annual consolidated revenue of at least $100 million will be required to comply with the obligations set out in the Modern Slavery Bill.

Obligations of a reporting entity
A reporting entity will need to submit annual ‘modern slavery statements’ to the responsible Minister within six months after the end of the reporting entity’s financial year.

The statement must include:

  • The structure, operations and supply chains of the reporting Entity;
  • The risks of modern slavery practices in the operations and supply chains of the reporting entity and any entities that the reporting entity owns or controls;
  • The actions taken by the reporting entity and any entity that the reporting entity owns or controls to assess and address those risks (including due diligence and remediation processes);
  • How the reporting entity assesses the effectiveness of such actions; and
  • The process of consultation with any entities that the reporting entity owns or controls.
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