Written by: Phil Sealy – Pro Leaders Academy Pty Ltd
The Federal Government introduced a tough new regime designed to stamp out modern slavery late last year, which compelled corporations to do more to end the use of forced or child labour. The new legislation require large businesses operating in Australia to regularly report on the risks of modern slavery in their supply chains, both domestically and internationally, and outline what they are doing to combat it.
|There is an estimated 4,300 people in Australia believed to be enslaved!
Modern Slavery Act 2018
The Commonwealth Modern Slavery Bill was passed through both houses of Parliament on 30 November 2018, to combat modern slavery practices that still exists in Australian that relates to human rights, including human trafficking, slavery, and slavery-like practices such as forced labour, child labour, child prostitution, and forced marriages. Currently, there are no formal mechanism in place to directly target modern slavery in business operations and supply chains, or supports the businesses to take actions to address modern slavery.
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 estimated to be enslaved.
Simply put, the Commonwealth Modern Slavery Act 2018 is a piece of legislation to increase awareness of modern slavery risks and requires entities who are based, or operates, in Australia with an annual consolidated revenue of more than $100 Million, to report annually on the risks of modern slavery in their operations and supply chains and the actions they take to address those risks. All other entities based, or operating, in Australia may report this voluntarily. This also applies for Non-Corporate and Corporate Commonwealth entities and companies with an annual consolidated revenue of more than $100 Million, however the Commonwealth is required to report on behalf of participating Non-Corporate Commonwealth entities.
These reports are maintained in a public repository known as the Modern Slavery Statements Register and may be accessible by the public, free of charge and on the internet.
As of 1 January 2019, NSW became the first Australian jurisdiction to enact a state-level legislation that is separate to the Commonwealth version of the Act. The Act is yet to commence and upon commencement, it will mandate commercial organisations with employees in NSW and a turnover between $50 Million and $100 Million to report to the Anti-Slavery Commissioner and advise of steps to reduce the risk of modern slavery across their operations and supply chains. Queensland is still reviewing the Commonwealth Act to determine if there is a requirement for a Queensland version.
In 2021, the legislation will be reviewed by the Minister being three (3) years from when it commenced.
How does this affect you and your procurement activities?
Entities may now be asked to enter into contracts which contain a warranty to the effect that their organisation, as well as their employees and agents, are not in breach of, and will continue to not breach, the Commonwealth Act and active State Acts that relates to modern slavery.
Things to consider or implement now:
- Incorporate this legislation into all Approach to Market (ATM) documentation, even if the relevant Act has not yet commenced;
- Include the evaluation of this legislation in normal procurement procedures, particularly in supply chains where slavery has been known to be an ongoing concern, such as clothing and manufacturing;
- Search the public registers to ensure all current suppliers/providers and their third-party entities are not in breach of the Act; and
- Implement a due diligence process to ensure you are not seen to be supporting slavery as an organisation or in the organisations that you do business with.
Under the Commonwealth Act, entities with a minimum annual consolidated revenue of $100 Million are required to report to the Department of Treasury, whereas business conducted in NSW, when the NSW Act commences, will be obliged to report under the NSW Act for turnovers of $50 Million and $100 Million.
The first reporting year is for the period of 1 July 2019 – 30 June 2020 and with a submission deadline of 31 December 2020. Depending upon the timing of some entities’ end of financial year reporting, entities with an international financial year may have to report earlier. The report forms the organisation’s Modern Slavery Statement, and consists of the following mandatory reporting criteria:
- The reporting entity’s details;
- The reporting entity’s structure, operations, and supply chains;
- Any 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;
- Any 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 will/have assessed the effectiveness of such actions;
- The process of consultation with:
- any entities that the reporting entity owns or controls; and
- the entity giving the statement, if the reporting entity is covered by a statement under Section 14; and
- Any other information that the reporting entity, or the entity giving the statement, considers relevant.
For example, Point 4 suggests that actions taken by an entity may include the development of policies and processes to address modern slavery risks and providing training for staff about modern slavery.
The full legislation can be found:
NOTE: The content of this article is intended to provide a general guide to the subject matter, and specialist advice should be sought about your specific circumstances. The content must not be relied upon as legal, technical, financial or other professional advice.