This article was updated on 29 August 2018 and provides an update to our previous coverage on this matter.
Slavery is thought of as something from a past era. However, legislators across the world have passed laws this decade to combat modern slavery, for example, in 2010 California passed the Transparency in Supply Chains Act. In 2015, the UK followed with the Modern Slavery Act.
Australia has also taken the lead.
On 24 August 2018, the Legal and Constitutional Affairs Legislation Committee duly reported on the Modern Slavery Bill.
Key recommendations include greater transparency on reporting standards, and the appointment of an independent anti-slavery commissioner.
While the Bill was endorsed, concern endures as to whether opprobrium absent any penalty can truly eliminate modern slavery.
Why do we need laws to combat slavery in the 21st century?
Since 2004 in Australia, there have been reports of over 350 suspected victims in a range of industries, including domestic service (including in embassies), hospitality, construction and the sex industry. The Global Slavery Index 2018 estimates there are approximately 15,000 people trapped in modern slavery in Australia. The United Nations estimates some 40 million people are affected by slavery with half those located in our Asia Pacific region.
Slavery, and ‘slavery like offences’ are already contrary to the criminal law in Australia under the Criminal Code Act 1995. There have been 55 prosecutions and 21 convictions. Despite this activity, the Modern Slavery Bill was promoted to engage the business community. According to the Explanatory Memorandum (EM), the law is required to:
“….assist the business community in Australia to take proactive and effective actions to address modern slavery. This will help mitigate the risk of modern slavery practices occurring in the supply chains of goods and services in the Australian market.”
The EM describes modern slavery as:
“…an umbrella term used to describe trafficking in persons, slavery and slavery-like practices, such as forced labour and forced marriage, as well as the worst forms of child labour.”
What will the obligations be, when the Modern Slavery Bill becomes law?
An entity that ‘carries on business in Australia’ with an annual revenue greater than $100 million must report annually on the risks of modern slavery in their operations and supply chains. This obligation is set out in the Modern Slavery Reporting Requirement which requires a reporting entity to file a Modern Slavery Statement (MSS) for any year that consolidated revenue is above $100 million. The Australian government must also file a MSS. Any entity, not otherwise obliged by the law, may volunteer to file a MSS.
The MSS must consider operations on a global basis, not just Australia, and include the supply chain. The law requires a MSS to address key criteria, including:
- reporting entity’s structure, operations and supply chains
- risks identified in the operations and supply chains
- actions taken to assess and address risk
- the effectiveness of those actions
- any other information considered relevant
The MSS will be registered on a free, publicly accessible website that will host the Modern Slavery Statements Register to promote transparency and the effectiveness of the Modern Slavery Reporting Requirement.
How extensive is the obligation?
It is predicted that 3,000 businesses will be obliged to file a MSS, in addition to the Commonwealth government and its agencies. The Government has committed $3.6 million in its 2018 budget to establish a dedicated Modern Slavery Business Engagement Unit within the Department of Home Affairs.
The operation of the Act will be reviewed after three years.
Meanwhile in New South Wales
New South Wales has already enacted its own Modern Slavery Act on 21 June 2018. If a business has one employee in that State it will be covered by broadly equivalent provisions. While it will overlap with the proposed Commonwealth Bill, there are some differences, including:
- a business with a turnover of $50 million or more must file an annual modern slavery statement
- an Anti- Slavery Commissioner will be appointed to oversee the legislation, a feature absent from the Commonwealth initiative
- financial penalties of up to $1.1 million in contrast to the proposed Commonwealth law, which relies on naming and shaming those businesses, which do not comply. Offences cover failure to file a statement, when required, failing to publicise a statement or for giving misleading information
There is a small business exemption for the first 18 months if an employer has fewer than 20 employees.
If your business has a turnover of at least $50 million and one employee in New South Wales, then you are already covered by State law. If not, and revenue is in the region of $100 million within a group of companies, then the Commonwealth obligation will apply.
The purpose is to makes businesses think about how they do business on a global scale, including within its supply chain, and to take steps to eradicate any risk of modern slavery. The UK experience has been slow and patchy with few prosecutions occurring, despite the issue being very prominent.
Much will depend on the resources available, and the desire to prosecute in Australia. The Commonwealth is currently taking a strictly educational approach (however the Labor party strongly criticised the bill for excluding penalties. This may be incorporated into the legislation, if the Labor party forms the government). New South Wales clearly has prosecution on its mind. Time will tell whether the policies of Commonwealth or New South Wales will be more effective in combatting what remains a persistent blight on labour and business practices in Australia.