Modern Slavery Act passed
The Federal Modern Slavery Act 2018 has been passed and will likely be in force in early 2019.
The legislation targets both Australian based entities and entities operating in Australia (notwithstanding the place of incorporation) and relevant Commonwealth entities with annual consolidated gross revenue exceeding $100 million. These entities will be required to report annually on the risks of modern slavery in their operations and supply chains and actions to address those risks.
Modern Slavery Statements
The Act establishes a Modern Slavery Reporting Requirement necessitating an annual Statement to the Minister for Home Affairs addressing mandatory criteria, including:
- The entity’s structure, operations and supply chains;
- The potential modern slavery risks in the entity’s operations and supply chains;
- Actions the entity has taken to assess and address those risks, including due diligence and remediation processes; and
- How the entity assesses the effectiveness of those actions.
The Act places responsibility and ownership of the Statement at the very top of the organisation requiring approval by the entity’s principal governing body.
Modern Slavery Statements will be published online on a Government-administered, public register.
Failure to comply will not result in an offence or civil penalty under the Act, however the Minister may request an explanation from an entity about the entity’s failure to comply with a requirement in relation to modern slavery statements, and may also request that the entity undertake remedial action in relation to that requirement. If the entity fails to comply with the request, the Minister may publish information about the failure to comply on the register, including the identity of the entity.
The Minister must report annually about the implementation of the Act, including an overview of compliance by reporting entities and the identification of best practice modern slavery reporting during the year.
Most reporting entities will be required to prepare and publish their first modern slavery statement in 2020, covering the 2019/20 financial year.
The Act provides for a review of the legislation three years after commencement to ensure effectiveness and responsiveness to the Australian context.
The Department of Home Affairs has indicated that it will provide detailed guidance for business with respect to complying with the new reporting requirements by mid 2019.
We are assisting affected clients with mapping their structure, businesses and supply chains and collating current policies and identifying gaps and carrying out further due diligence in the operation and supply chain and reviewing and adapting contract terms and codes of conduct with suppliers.
This article was written by Nick Karagiannis, Partner.
P: +61 8 8205 0876
Important Disclaimer: The material contained in this publication is of a general nature only and is based on the law as of the date of publication. It is not, nor is intended to be legal advice. If you wish to take any action based on the content of this publication we recommend that you seek professional advice.