The Modern Slavery Act has been passed by Commonwealth Parliament and will commence on 1 January 2019.
The Act requires entities with annual revenue of $100 million or more based or operating in Australia to prepare annual statements on potential modern slavery risks in their operations and supply chains and the steps they have taken to address those risks.
The first statement under the Act must be submitted by 30 June 2020 (for calendar-year-reporting entities) or 31 December 2020 (for financial-year-reporting entities).
Modern slavery is a term used to refer to a range of exploitative practices including slavery and slavery-like practices/conditions (such as debt bondage, servitude, forced marriage, deceptive recruiting for labour or services, child labour, and forced labour) and human trafficking (also referred to as trafficking in persons).
For each reporting entity covered by a modern slavery statement, the statement will be required to:
• identify the reporting entity
– the structure, operations and supply chains of the entity
– the risks of modern slavery practices in the operations and supply chains of the entity and any entities it owns or controls
– the actions that the entity and any entities it owns or controls have taken to assess and address the risks identified, including due diligence and remediation processes
– how the entity assesses the effectiveness of those actions and
– the consultation process with any entities the entity owns or controls and
• include any other information that the reporting entity or the entity giving the statement considers relevant.
Statements for single reporting entities will require the approval of the entity’s principal governing entity (such as a board of a company) and the signature of a responsible member of the entity (such as an authorised member of the board).
Who must report?
Australian entities (including corporate Commonwealth entities and Commonwealth companies) with annual revenue of $100 million or more, and foreign entities operating in Australia with annual revenue of $100 million or more, will be required to submit annual modern slavery statements to the responsible Minister.
Entities with lower annual revenue may voluntarily provide statements.
The Minister will be required to prepare annual modern slavery statements covering all non-corporate Commonwealth entities.
All statements will be made publicly available in an online register.
Although there is no obligation to do so, it will be appropriate for business lenders to check the register for compliance by borrowers.
There will be no financial penalties for non-compliance but the Minister can require suspected non-compliant entities to explain why they have not complied with the Modern Slavery Reporting Requirement and/or to undertake specified remedial action.
The scheme will be reviewed after three years, and a report on the review will be tabled in Parliament.