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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