New Mandatory Reporting Obligations Under Commonwealth and NSW Modern Slavery Legislation

In 2018, the Commonwealth and NSW parliaments enacted legislation to require commercial entities and organisations with consolidated revenue over $100 million (Cth) and $50 million (NSW) to publish an annual modern slavery statement that identifies the potential modern slavery risks in the entity’s global operations and supply chains and the steps taken by the entity to address the identified risks. The modern slavery statement will be made available online through a government run register, with the aim of providing increased transparency for investors, consumers and other stakeholders.

What you need to do

If you operate in Australia and your group has annual turnover exceeding $100 million, or have employees in NSW and your turnover exceeds $50 million, then you must prepare a statement for submission to government on an annual basis. The Commonwealth legislation provides that the statement for the relevant period must be provided within six months of your financial year end. The first relevant reporting year will be FY19.

If you do not already, you need to understand and document your supply chains so that you are prepared for effective reporting. If that process identifies risk areas, they can be ameliorated appropriate by policies, compliance procedures, training, and proper drafting of supplier contracts.

Key features of the Commonwealth Act: Modern Slavery Act 2018 (Cth)

• Modern slavery is defined as conduct that would constitute an offence under the slavery and trafficking divisions of the Criminal Code Act 1995 (Cth), and the relevant international treaties. This includes forced labour, child labour, deceptive recruiting for labour or services, forced marriage, debt bondage and human trafficking.
• The Commonwealth Act applies to acts, omissions, matters and things both domestically and outside Australia.
• A reporting entity is identified as an entity and any of its controlled entities (both Australian and foreign entities operating in Australia) which have a consolidated revenue of at least $100 million for the reporting period.
• Entities who do not meet the consolidated revenue threshold can volunteer to publish a modern slavery statement.
• The modern slavery statement must identify:
  • the structure, operations and supply chains of the reporting entity;
  • the risks of modern slavery practices in the operations and supply chains and actions taken by the reporting entity to assess those risks;
  • the method by which the entity assesses the effectiveness of any actions; and
  • the process of consultation with any entities that the reporting entity owns or controls.
• The Commonwealth Act aims to increase senior management accountability by requiring the modern slavery statement to be approved by the ‘principal governing body’ of the reporting entity, which for most entities, is its board of directors.
• The Minister may give a written request or undertake specific remedial action if an entity does not comply with the reporting requirements as set out in the legislation. In addition, the Minister may publish information in relation to an entity’s failure to comply with a request within the specified time.
• A public register of modern slavery statements will be made available online.

Key differences of the NSW Act: Modern Slavery Act 2018 (NSW)

• A modern slavery offence is defined as conduct that would constitute an offence under the relevant sections of the Crimes Act 1900 (NSW), the Human Tissue Act 1983 (NSW) and the Criminal Code Act 1995 (Cth). This includes conduct of business involving sexual servitude, offences involving child abuse material and trading in tissue.
• The NSW Act introduces the appointment of an independent Anti-Slavery Commissioner and a Modern Slavery Committee.
• A commercial organisation is defined as an entity which has a total turnover of at least $50 million for the reporting period.
• In addition to the mandatory information prescribed by the Commonwealth Act, the NSW Act requires the inclusion of information about the availability of training about modern slavery to its employees in its modern slavery statement.
• Failure to comply with the reporting requirements set out by the legislation or providing false or misleading information can result in a maximum penalty of $1.1 million.
• A court may make a modern slavery risk order against a person convicted of a modern slavery offence, prohibiting the person from engaging in conduct described in the order.

Contact Us

If you would like more information on the modern slavery statement and assistance with its preparation, please contact Alistair McKeough at alistair.mckeough@www.automicgroup.com.au or via +61 2 8072 1400.