Modern Slavery Act 2018

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Modern Slavery Act 2018

New human rights legislation

The Modern Slavery Bill 2018 has been passed by both houses of Parliament and is likely to come into effect on 1 January 2019. First reports are expected in 2020 within six month of the entity’s reporting year and are required to be signed off by the entity’s principal governing body.

The Commonwealth 2018 Modern Slavery Bill has been passed – what you need to know

The Modern Slavery Bill 2018 has been passed by both houses of Parliament and is likely to come into effect on 1 January 2019. 

It establishes a Modern Slavery Reporting Requirement that requires entities operating in Australia with more than AUD$100 million annual revenue to produce an annual public statement describing what they are doing to address modern slavery risks. Other entities may voluntarily report. 

First reports are expected in 2020 within six months of the entity’s reporting year and are required to be signed off by the entity’s principal governing body.

Why we have this legislation 

This is a very important piece of human rights legislation for Australian business. The problem of modern slavery occurs mainly in global supply chains, which business has the power and influence to address. Modern slavery comprises practices such as human trafficking, slavery, forced labour, child labour, and slavery-like practices.

The Explanatory Memorandum to the legislation makes it clear that the problem is pervasive and no business is likely to be immune. It says: “There is a high risk Australian business are exposed to modern slavery risks and that Australian goods and services are tainted by modern slavery.” The notes further states: “It is not expected that a reporting entity would ordinarily identify no modern slavery risks in their operations or supply chains.” 

Reporting requirements

The Modern Slavery Statement must describe: 

  • 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
  •  How the entity assesses the effectiveness of those actions. 

The Bill extends outside Australia. This means reporting entities may consider acts, omissions, matters and things that occur outside Australia in preparing Modern Slavery Statements. For example, reporting entities will need to consider modern slavery risks in their global operations and supply chains, not only their operations and supply chains in Australia.

A public register of Modern Slavery statements will be established and maintained by the Department of Home Affairs. 

In 2019, the Australian Government will provide detailed explanatory information about the definition of ‘modern slavery’, including case studies, in formal administrative guidance.

Penalties for non-compliance 

The Bill also provides power to the responsible Minister to send “please explain” letters to non-complying entities, to require certain acts of remediation by non-complying entities, and to publish the list of names of entities that have not complied with the legislation. While there are no financial penalties for non-compliance being considered in the first three years of the legislation, the impact on an entity’s reputation is considered likely to be so significant as to compel a high degree of compliance.

What types of action you need to consider

While the Act does not explicitly require businesses to undertake specific work programs such as conducting a human rights due diligence, nor to remedy any harms identified, its provisions specifically refer, at section 16(1)(d), to both due diligence and remediation processes. It also refers to actions such as implementing policies and processes and providing training to staff. 

This creates an expectation that entities will undertake these actions as part of their reporting process.

How Deloitte can help

Many of our clients have already begun to prepare for the Modern Slavery Act. We encourage those who have not already done so to contact us for an obligation-free discussion about your preferred road map to comply with the Modern Slavery Bill. Among the services our clients are using are:

  • Modern Slavery Act Readiness Assessment
  • Modern Slavery and Human Rights Due Diligence and Risk Assessment (operations and supply chains)
  • Policy review and development
  • Education and training
  • Supplier engagement and remediation programs
  • Supply chain optimisation
  • Supplier audits
  • Managed services for supplier engagement and risk assessment

Deloitte training: building your capacity to act

We are holding public-access half-day short courses on getting ready for the legislation on 2 April 2019 in Melbourne and 30 July 2019 in Sydney (course fee $550 plus GST). This course is also available as an in-house program.

Published: December 2018

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