Modern slavery legislation: what you need to know and how to prepare
The Modern Slavery Bill (Cth) (MS Bill) and the Modern Slavery Act 2018 (NSW) (NSW Act) are Australia’s response to a recent global movement to better address modern slavery. It follows similar legislation in the UK and the US. The basic idea is that governments can prevent human rights abuses by forcing large organisations to proactively report on their actions to address modern slavery risks in their operations and supply chains.
‘Modern slavery’ in this context includes not only slavery itself, but:
The effect of the MS Bill and the NSW Act will be to require organisations (called Reporting Entities) that meet certain threshold requirements to produce a Modern Slavery Statement (MS Statement). MS Statements will be published in public registers.
The location of your employees and the size of your business will affect where you have to report (if at all). If you have an employee in NSW and an annual turnover between $50 million and $100 million you will have to report to the yet-to-be-appointed Anti-slavery Commissioner in NSW.
If your consolidated annual revenue is ≥$100 million you will have to report to the Commonwealth Minister for Home Affairs (regardless of where you do business).
Businesses who do not meet these criteria will not, currently, have to directly report anywhere, but see ‘SME’s caught in the crossfire’, below.
There’s still a fair bit of detail to be provided by government about what goes into a MS Statement. However, we can say with confidence that, at a minimum, MS Statements will require businesses to describe:
Somewhat strangely, the NSW Act contains fines of up to $1.1million for non-compliance, while the MS Bill contains no fines at all.
In practice, Reporting Entities will have to perform due diligence on the entities within their supply chains, who in turn are likely to have to do the same with their supply chains. This places a potentially onerous obligation on smaller businesses that might not have the resources to quickly conduct extensive supply chain audits. Further issues arise for smaller businesses who might receive requests for different information from multiple Reporting Entities.
The old saying that proper planning prevents poor performance will almost certainly ring true here. If:
some sort of supply chain audit is inevitable.
Knowing what is required of your business and having a plan in place will save time and effort in complying. It will also provide a potential comparative advantage in a competitive market, noting that a failure to properly respond could result in a client or customer taking their business elsewhere.
HopgoodGanim Lawyers can assist you in preparing your Modern Slavery Statement and/or responding to any requests for information about your own supply chains. For further information, please contact our Workplace and Employment team.