After several years of reports and recommendations, the Australian Parliament has passed the Modern Slavery Act 2018—carrying an imperative for businesses in Australia to take action on their modern slavery risks and responsibilities.

Updates to the legislation

The Modern Slavery Bill generated impassioned debate in both the House and Senate, passing with bipartisan support and several amendments to the legislation:

  • Explanations for failure to comply: If the Minister is reasonably satisfied that an entity has failed to comply with the reporting requirements, the Minister can request that the entity provide an explanation and/or undertake remedial action. The Minister can publish information about entities that have failed to comply with a request.
  • Minister’s Annual Report: The Minister must prepare an Annual Report assessing implementation of the Act, including an overview of compliance by entities and the identification of best practice modern slavery reporting under the Act during the year.
  • Three-year review: The Government agreed to a review of the legislation in three years’ time, which will include whether additional compliance measures are needed.

Labor has signalled that it will push for further amendments if elected into Government next year, including civil penalties for non-compliance, an Independent Anti-Slavery Commissioner, and a public list of entities required to report.

Clarity on reporting requirements

Businesses now have clarity on their modern slavery reporting requirements: All entities operating in Australia, with an annual consolidated revenue of over AUD $100 million, will need to publish a Board-approved modern slavery statement under the federal legislation within six months of the end of their financial year.

Organisations with employees in NSW and a turnover of over AUD $50 million will need to publish modern slavery statements under the NSW law. The Government has stated that businesses reporting under the federal legislation will not need to do so under the NSW law.

If not now, when?

The UN Working Group on Business and Human Rights recently released a report on corporate human rights due diligence with a key takeaway for businesses: just get started. Human rights due diligence and risk management has become an expected norm around the world—requiring proactive, ongoing investment from businesses to know and show that they are meeting their responsibilities to respect human rights. With the passage of the Modern Slavery Act, this should now be at the forefront of the corporate agenda here in Australia.

A proactive and strategic approach

Here are our next steps for Australian businesses.


We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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Modern slavery legislation at the Commonwealth level in Australia is getting closer.

The Modern Slavery Bill 2018 (Cth) passed the Lower House last week. The Opposition pushed for several amendments to the legislative framework including establishing an Independent Anti-Slavery Commissioner to oversee implementation and enforcement of the legislation, the introduction of penalties on companies for non-compliance with their reporting obligations, and an obligation on the Minister to report annually on compliance by reporting entities. While none of these passed, the Opposition nevertheless supported the passage of the legislation as it currently stands.

The Bill has been introduced into the Senate with debate adjourned until the next period of sittings in mid-October 2018.

Notwithstanding the recent change of Federal Minister responsible for the Australian Government’s strategy to combat modern slavery, there remains broad and bipartisan support for the Bill and the Federal Government remains committed to having the legislation passed this year.

If you’re not at the table, you’re on the menu

Modern slavery has become one of the highest-profile business and human rights issues in Australia, with significant engagement from investors, scrutiny from civil society, and interest from across the political spectrum. Meeting the legislative requirements – and satisfying the growing market standards – will require a proactive and strategic approach to modern slavery risk assessment, due diligence, and external reporting.

To get ready for the Commonwealth legislation, which is likely to take effect in January 2019, see our Modern Slavery Action Plan.

NSW legislation

Since our blog in June 2018, there have been no updates on the NSW Modern Slavery Act 2018 – which still has not commenced operation despite being passed by the NSW Parliament on 21 June. This is likely due to stakeholder lobbying for one nationally consistent modern slavery reporting regime across Australia. In our view, this would make sense for businesses so that they do not have to comply with competing obligations under State and Commonwealth regimes (subject to any Constitutional inconsistency arguments).

The reporting obligations under the NSW and Commonwealth legislation are largely, although not entirely, overlapping. The NSW legislation allows for the NSW government to prescribe, among other things, that the NSW reporting obligations do not apply if an organisation is subject to obligations under a corresponding law of the Commonwealth. However, the big sticking points for NSW in deciding whether to cede entirely to the Commonwealth in this space are likely to be:

  • there are substantial penalties under the NSW legislation, but none under the Commonwealth regime and
  • the NSW scheme applies to organisations with a total turnover in a financial year of at least $50 million whereas the Commonwealth Bill, when passed, will only impose mandatory reporting obligations on organisations with an annual revenue of over $100 million.

We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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Over 40 million people around the world are trapped in conditions of modern slavery, according to research from the Walk Free Foundation and the International Labour Organization. The fight against modern slavery is fragmented. Governments, non-governmental organisations (NGOs) and law enforcement agencies are engaged in their own fights at various levels (local, regional, national, global) with little collaboration.

In increasingly globalised markets, there is growing regulatory and consumer pressure on businesses to eliminate the exploitative practices of modern slavery in their operations and global supply chains.

Businesses have the chance to lead the way in the growing global effort to eliminate the exploitative practices of modern slavery; they are uniquely positioned to educate the largest constituency—their employees and business partners. By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent human rights issue.

However, they cannot do it alone and, to be effective, businesses will need to go beyond mere compliance efforts centred on due diligence/disclosure and focus on transparency and collaboration with government and NGOs. Technological advancements are providing real and substantial opportunities for improvement.

Using technology for greater transparency

Governments and NGOs are starting to take advantage of technology to spread knowledge and tools for those in the private sector and communities to educate themselves and learn how they can take action.

For example, the U.S. Department of Labor has created two apps—Sweat & Toil and Comply Chain—that each have a different focus. Sweat & Toil is a resource companies can use in their risk assessments to identify whether goods used are produced with child or forced labour. It consolidates information on other countries’ legal and enforcement standards, among other things. Comply Chain creates a standard of set practices to reduce the likelihood of goods being produced with child or forced labour. It provides a blueprint for businesses to create or enhance a social compliance system.

NGOs like Stop the Traffik, a global organisation focused on prevention of modern slavery, has created a Center for Intelligence Led Prevention, in partnership with IBM, to collect, analyse and disseminate information about modern slavery routes and risks. With the dissemination of such information, the efforts in this fight can become less fragmented.

Likewise, for businesses to really make a difference as they embark—voluntarily or involuntarily—on responding to a new regulatory scheme, technological advancements will give them an opportunity to support their actions in working towards transparency and ethical supply chains. For example:

Worker voices – Utilising mobile platforms allowing two-way, real-time communication for workers throughout the supply chain.

Traceability of materials and supplies – Using blockchain to trace products along their journey from producer to consumer.

Supplier and worker engagement – Equip and use data analytics to monitor labour-related risks in real-time, creating more responsible global supply chains.

Risk assessments – Mining data (for example, from mobile phones, media reports and surveillance cameras) which can be analysed using artificial intelligence and machine learning to extract meaningful information and identify risks in the supply chain.

Employee engagement – Using internal communications tools to allow employees to engage and become educated, particularly in recruiting.

Technology can only be as good as the purpose for which it is used and how carefully the information acquired from it is leveraged. If effective tools are used to educate and learn from the different actors within the supply chain, there is opportunity for businesses to work with governments and NGOs to build and share knowledge.

The compliance framework

In addition, there is a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues.

These include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, the U.S. Federal Acquisition Regulations, and the California Transparency in Supply Chains Act. Legislatures in Canada and Hong Kong are also currently considering modern slavery laws, alongside Australia’s proposed Modern Slavery Act and NSW’s Modern Slavery legislation.

The compliance steps for meeting legislative requirements will not be unfamiliar to businesses; the these steps will be much like actions taken for compliance with anti-bribery laws.

Between the growing global compliance framework, technology and the willingness of business to honestly review their operations, comes the potential for a new level of transparency and commitment, helping to build on efforts to fight modern slavery and more holistically bring this largely hidden crime to light.

We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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The introduction of the Commonwealth Modern Slavery Bill 2018 on 28 June 2018 sets an imperative for businesses operating in Australia to know, and show, how they are identifying and addressing the risks of modern slavery.

Reporting Requirement

At the centre of the Bill is the Modern Slavery Reporting Requirement: a mandatory requirement that entities based, or operating, in Australia, which have an annual consolidated revenue of more than AUD $100 million, report annually on the risks of modern slavery in their local and global operations and supply chains, and take actions to address those risks.

Any ‘reporting entity’ meeting the threshold—and any other entity that volunteers to comply with the legislation—will need to publish an annual statement, within six months of the end of their financial year, describing the risks and actions it has taken in relation to modern slavery: a term broadly defined to include all forms of trafficking in persons, slavery and slavery-like practices, and the worst forms of child labour.

Modern slavery statements, which must be approved by an entity’s principal governing body and submitted to a public, government-run register, will need to:

(a)       identify the reporting entity;

(b)       describe the structure, operations and supply chains of the reporting entity;

(c)        describe the 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;

(d)       describe the 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;

(e)       describe how the reporting entity assesses the effectiveness of such actions;

(f)        describe the process of consultation with any entities that the reporting entity owns or controls, or entities with which it gives a joint modern slavery statement; and

(g)       include any other information that the reporting entity, or the entity giving the statement, considers relevant. 

Action Plan

Businesses should develop an action plan—guided by the legislative criteria, and in line with the UN Guiding Principles on Business and Human Rights—that establishes a comprehensive modern slavery and human rights due diligence process:

  • Policy commitment: Formulate a high-level, public statement that outlines the business’s commitment to meeting its responsibility to respect human rights, including a rejection of any form of modern slavery in its operations and supply chains. This should be approved by the entity’s principal governing body, informed by expertise, and clearly communicate the organisation’s expectations as to how all personnel, business partners and other stakeholders should act.
  • Risk assessment: Map out the business’s operations and supply chains in order to identify key areas of modern slavery risks by location, industry and supplier. In doing so, businesses should assess actual and potential modern slavery risks associated with their operations, supply chains and business relationships. This process may involve conducting human rights impact assessments, internal investigations, and ongoing engagement with affected stakeholders.
  • Take action: Integrate findings from risk assessments into corporate governance strategy and core business decision-making.. Effective action requires that businesses embed their policy commitment across all relevant internal functions, create oversight processes, and take direct, informed action to prevent, mitigate and remediate any identified modern slavery risks and impacts.
  • Provide training: Develop training programmes for management, staff, suppliers and other stakeholders in how to practically identify, assess and address modern slavery risks across the business’s operations, supply chains and relationships. Training should be informed by research and consultations, and can be further embedded through codes of conduct and contractual provisions.
  • Track progress: Verify whether adverse modern slavery impacts are being addressed by using appropriate qualitative and quantitative indicators—including reviews, surveys, audits, and other data—and by drawing on internal and external feedback, particularly from affected stakeholders.
  • Report: Communicate publicly how the business is addressing modern slavery risks and impacts, including via the criteria set out in the Modern Slavery Reporting Requirement.

There is a growing, global effort to eliminate the exploitative practices of modern slavery—one that is now likely to materialise into a formal legal requirement for businesses operating in Australia. By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent moral issue.

Establishing the Modern Slavery bill

This bill has been released following a consultative process, that included a report from the Joint Standing Committee on Foreign Affairs, Defence and Trade from its inquiry into establishing a Modern Slavery Act in Australia.

The broader international context

Australian’s approach fits into a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues – these include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, and the California Transparency in Supply Chains Act. Legislatures in Canada and Hong Kong are also currently considering modern slavery laws. In addition, New South Wales has passed its own modern slavery legislation.


We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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The NSW Parliament yesterday passed the Modern Slavery Bill 2018. It is now awaiting assent and a commencement date, however businesses should not wait and begin planning for the new obligations.

Supporting regulations will follow that deal with the finer details even without these, businesses should now urgently consider whether they will be caught by this legislation and consider how they are going to meet their compliance obligations. There will be significant maximum penalties applying to breaches of obligations.

Will this legislation apply to your business?

The legislation will apply to any commercial organisation who:

  • has employees in NSW; and
  • supplies goods and services for profit or gain; and
  • has a total turnover in a financial year of the organisation of not less than $50 million or such other amount as may be prescribed by the regulations.
What are your key obligations?
  1. Preparation of a complying modern slavery statement for each financial year.
    The statement is to contain such information as may be required by regulations as to steps taken by the organisation during the financial year to ensure that its goods and services are not a product of supply chains in which modern slavery is taking place. Without limiting those requirements, the regulations may require a modern slavery statement to include information about the following:
    – the organisation’s structure, its business and its supply chains
    – its due diligence processes in relation to modern slavery in its business and supply chains
    – the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk
    – the training about modern slavery available to its employees. Regulations will prescribe the timeframe for preparing the statement after the end of the relevant financial year.
  2. The organisation must make its modern slavery statement public in accordance with the regulations.
  3. The statement must not provide information that the organisation knows, or ought reasonably to know, is false or misleading in a material particular.

Each of these obligations is subject to a maximum penalty of 10,000 penalty units ($1.1 million) for failure to comply.

How does this interact with the foreshadowed Federal Modern Slavery legislation?

We have not yet seen any draft legislation federally, although it has been foreshadowed.

The NSW legislation provides that the reporting obligations do not apply if the organisation is subject to obligations under a law of the Commonwealth or another State or a Territory that is prescribed by the NSW government as a corresponding law. Presumably this is intended to deal with the overlap of any Commonwealth legislation in this space. However, based on recent statements by the Federal Minister, that legislation seems unlikely to have penalties attached to the reporting obligations and will only apply to organisations with a turnover of more than $100 million, so it is possible it won’t be prescribed and our clients will need to comply with obligations under both regimes (which are largely but not entirely overlapping).


We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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Social, technological and economic forces impacting the workplace will continue to pose challenges for employers, employees, unions, policy makers and regulators in 2018.

Disruption

In 2016 the CEDA reported that 40% of Australia’s workforce could be replaced by automation within the next 10 to 20 years. Of course, automation has been happening since the industrial revolution – but the nature, pace and scale of automation is now being fuelled by digital disruption. These changes are happening now, or their seeds are being sown in many a workplace.

The Government recently established the Senate Select Committee on the Future of Work and Workers. Expect its report in June.

Corporate accountability for workplace breaches

This is one for boardroom ‘risk buckets’. Expect to see increased activity from the Fair Work Ombudsman targeting holding companies and franchisors following the enactment of the Protecting Vulnerable Workers legislation in September 2017. These changes bring home accountability to holding companies and franchisors for certain workplace contraventions by their subsidiaries and franchisees. These changes take individual and corporate responsibility for workplace compliance to a new level.

Wage growth and bargaining

There are mixed views here with economists tipping a return to healthy wage growth. Low wage outcomes have been reflected in collective bargaining. Tight economic conditions have seen many an employer “bunker down” to avoid high wage outcomes – effectively acknowledging the medium to long term impact of high cost outcomes is not worth the short term expediency of buying workplace peace. More than ever, collective bargaining and “workplace strategy” is grabbing the attention of the C-Suite, given their outcomes significantly impact the bottom-line and with compounding effect.

In the area of major project infrastructure, labour shortages will intensify in 2018. This will see a return to high cost “greenfield” agreements to incentivise project stability. Expect higher than average wage outcomes for skilled and semi-skilled labour, at least in some sectors.

Sexual harassment claims

In the wake of high-profile sexual harassment allegations against prominent individuals both here and abroad, expect to see an increase in the number of claims made in 2018. The tolerance for sexual harassment has never been lower and incentive to bring a claim has never been higher.

CFMEU and MUA merger

Make no mistake – the proposed merger of the CFMEU and MUA will be high impact. The construction and mining sectors’ reliance on port services bears this out. In circumstances where massive shipments of infrastructure hit our shores for major project construction, the nationwide impact of greater CFMEU-style control will be tangible.

Litigation funded union claims

Expect to see large union claims backed by litigation funders. These funders, typically from the UK, bankroll large scale litigation punting on a profit from the outcome. For unions, such financial backing facilitates litigation with the aim of extracting large financial settlements. This will encourage claims on a scale rarely seen in Australia, with medium and large employers with “deep pockets” in their sights.

Modern slavery and supply chain reporting

Another issue for the boardroom. Globally, there is a growing commitment to eliminate the exploitative practices of modern slavery which includes forced and child labour. Corporates are reviewing their respective labour supply chains lest they are exposed to allegations of being complicit in slavery. Details can be found in A Modern Slavery Act for Australia.

Change of government?

Federal elections inevitably shine a spotlight on the workplace. Expect the same if an election is held in 2018. The ALP has already expressed its concerns with the current workplace regime – despite it being largely a product of its own making. The “tilt of bargaining power away from workers and to employers has gone too far” according to Shadow Minister for Workplace Relations Brendan O’Connor.

Many an employer would beg to differ. Workplace laws have moved like a pendulum with changes to government in Australia, albeit remaining relatively static under the Abbott /Turnbull Governments. But it seems the pendulum will continue in its current trajectory under Labor. The Government will seek to remain a small target on workplace relations in 2018 as the recent Cabinet changes reflect. For employers, the regulatory environment will only get tougher should we see a Labor Federal Government.


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The Australian Government’s inquiry into establishing a Modern Slavery Act reflects a growing domestic and international commitment to eliminate the exploitative practices of modern day slavery, and recommends new reporting and due diligence obligations for businesses operating in Australia.

Hidden in plain sight

Over 40 million people around the world are trapped in conditions of modern slavery, according to estimates from the Walk Free Foundation and International Labour Organization, including an estimated 4300 victims “hidden in plain sight” in Australia.

Modern slavery—a term that encompasses slavery, servitude, forced labour, trafficking in persons, forced marriage, child trafficking, debt bondage, child labour and exploitation, and other slavery-like practicesexists both at home and abroad; across a range of local industries, and in the global supply chains of organisations and businesses operating in Australia.

Global supply chain reporting

Released last week, the final report of the Joint Standing Committee on Foreign Affairs, Defence and Trade in its inquiry into establishing a Modern Slavery Act in Australia sets out 49 recommendations, including the introduction of an Australian Modern Slavery Act and the establishment of an Independent Anti-Slavery Commissioner.

Similar to the United Kingdom’s Modern Slavery Act 2015, the final report recommends a mandatory supply chain reporting requirement that would require all entities operating in Australia with an annual revenue of over $50 million, regardless of where they are headquartered, to report on modern slavery risks in their global supply chains.

Companies, businesses, organisations, governments and other bodies that meet the threshold will, according to the report’s recommendations, need to publish annual Board-approved modern slavery statements within five months of the Australian financial year ending, detailing:

  • the organisation’s structure, its business and its supply chains
  • its policies in relation to modern slavery
  • its due diligence and remediation processes in relation to modern slavery in its business and supply chains
  • the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk
  • its effectiveness in ensuring that modern slavery is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate
  • the training about modern slavery available to its management and staff
  • any other actions taken.

While premised on the supply chain reporting requirements in the UK Modern Slavery Act 2015, the report goes several steps further: recommending a central repository of modern slavery statements, a requirement that the Australian Government only procure from entities that publish a modern slavery statement, and the introduction of penalties and compliance measures for entities that fail to abide by the reporting requirements.

The recommendations are aligned with the ‘Protect, Respect and Remedy’ framework of the UN Guiding Principles on Business and Human Rights. In particular, the requirement to report on due diligence processes relating to modern slavery risks echoes the UN Guiding Principles’ parameters for human rights due diligence—a process that includes assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.

Impacts on the corporate landscape

The report signifies a groundswell of support for measures to address worker exploitation and modern slavery—issues already front of mind in Australia with the recent passage of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, and situated within a growing domestic and international agenda on the human rights risks and responsibilities of businesses.

2018 portends to be a landmark year in the worldwide effort to eliminate modern slavery, with an expanding legislative and regulatory focus on the domestic labour practices and global supply chains of organisations, businesses and other entities operating in Australia.

For details of the NSW Modern Slavery Bill 2018 see NSW passes Modern Slavery legislation – key obligations for businesses.


Pete Talibart, Managing Partner of Seyfarth’s London office and a world-renowned expert on modern slavery, will be authoring blogs on the subject over the coming months and sharing his insights through direct involvement in the establishment of the UK Act.

To follow Seyfarth Shaw’s updates on the scope and substance of the proposed Australian Modern Slavery Act—and its implications as it develops into draft legislation in early 2018—please subscribe to our Workplace Law & Strategy blog.