Modern Slavery Act

The Modern Slavery Act 2018 (Cth) (‘Act’) commenced on 1 January 2019 and requires organisations with an annual consolidated revenue of more than $100 million to report annually on the risks of modern slavery within their supply chain. The Act is similar to the UK legislation. Organisations will be required to submit their first report after the conclusion of the 2020 financial year, meaning the responsibility is on decision makers to start reviewing and regulating their supply chain to comply with the new reporting obligation to create compliant and resilient supply chains.

The term ‘modern slavery’ is defined broadly within the Act to include conduct that would constitute an offence under the Criminal Code. Therefore, the term ‘modern slavery’ includes a range of exploitative practices such as slavery, child labour, servitude, forced labour, human trafficking, bonded labour and debt bondage, forced marriage and sexual servitude and other slavery-like practices. The United Nations estimates that there are more than 40 million victims of modern slavery worldwide[1]. The federal government has determined that there is a high risk that Australian businesses are exposed to modern slavery risks and that Australian goods and services are tainted by modern slavery. It is estimated that over half of the worldwide victims of modern slavery are exploited in the Asia-Pacific region, in which the supply chains of a significant number of large businesses operating in Australia are based[2].

The Act encompasses Australia’s fundamental responsibility as a global consumer of goods and services to promote good corporate social responsibility and target decision makers to ensure that workers are not subject to conditions of modern slavery.

Key features of the Act 

The objective of the Act is to mitigate any risk of modern slavery by demanding Australian organisations identify and take proactive actions to mitigate the risk of slavery practices occurring within the supply chains of goods and services produced in the Australian market. Organisations carrying on business in Australia, that have annual consolidated revenue of at least $100 million, are required to submit an annual modern slavery statement. An organisation’s modern slavery statement must:

• describe the entity’s structure, operations and supply chains;
• identify any potential modern slavery risks within the organisation;
• outline any taken or planned actions to mitigate this risk; and
• comment on the overall effectiveness of these actions.

The scope of the Act extends beyond Australia, meaning organisations are required to review their global operations, not just what occurs within Australian borders. There are no financial penalties for non-compliance with the Act, however, non-compliant organisation will be disclosed to the public and may suffer significant reputational damage.

How Gadens can help 

We are currently assisting many of our clients to review their supply chains to ensure compliance and prepare for the upcoming reporting period. Gadens can assist with:

• assessing and identifying high risk supply chains;
• developing modern slavery policy;
• establish KPIs to monitor effectiveness of implementation;
• educating teams and provide relevant training manuals;
• develop compliance strategies; and
• preparation of reporting documentation.

For further information simply contact Jonathon Hadley.

[1] Global estimates of modern slavery: Forced labour and forced marriage, International Labour Officer, Walk Free Foundation and International Organisation for Migration, Geneva, 2017.

[2] Modern Slavery Bill 2018 explanatory memorandum