Australia’s Modern Slavery Bill 2018 (Cth) finally made its way through Parliament. The Bill was passed by both Houses on 29 November 2018 after the House of Representatives approved the amendments raised in the Senate, which will give the responsible Minister additional powers to request an explanation or remedial actions to companies that fail to report.
The Modern Slavery Bill 2018 (Cth) constitutes an annual reporting requirement for companies with an annual consolidated revenue of $100 million or more and other Australian entities to publicly report on the slavery risks in their supply chains. While this requirement is mandatory for entities with revenues above the threshold, organisations with smaller revenues can join the scheme and provide voluntarily statements.
Reporting entities must provide an annual statement within 6 months of the end of their financial year to the Minister for Home Affairs. The statements, which will be made publicly available in an online register, will require the approval of the entity’s principal governing and the signature of a responsible member of the entity.
What will be required to include in a Modern Slavery Statement?
The statement will be required to include information on the organisation’s structure, potential modern slavery risks in their operations and supply chains, actions taken to determine and address the risks recognised, and the process to evaluate the effectiveness of those actions. Specifically, it must include the following:
- Identify the reporting entity
- the structure, operations and supply chains of the entity;
- the risks of modern slavery practices in the operations and supply chains of the reporting entity and any entities it owns or controls;
- the actions that the reporting entity and any entities it owns or controls have taken to assess and address the risks identified, including due diligence and remediation processes;
- How the entity assesses the effectiveness of those actions;
- The consultation process with any entities the reporting entity owns or controls
- Any other information that the reporting entity or the entity giving the statement considers relevant
The Bill was first introduced in June 28 2018, when the Australian Government put on notice Australia’s largest corporations, signalling the commencement of reporting requirements that will encourage greater transparency along the lengths of the supply chain.
Once the Bill receives Royal Assent from the Governor-General, becomes an Act and come into force, is expected that reporting entities will be required to provide their statements to the Minister within six months of the end of the 2019-2020 Australian financial year. Organisations with an international financial year will need to report within six months of their year-end.
NSW reporting regime
In parallel, NSW has already a modern slavery reporting requirement. It became the first Australian jurisdiction to enact this requirement in June 2018, however the Modern Slavery Act 2018 (NSW) is pending proclamation and regulation before commencement. After the Commonwealth Bill is enacted, there will be two reporting regimes in Australia, Commonwealth and NSW.
The NSW Act requires commercial organisations with employees in NSW and an annual turnover of $50 million to publish annual modern slavery statements. Differently to the Commonwealth Bill, the NSW Act delivers a range of penalties of up to 10,000 penalty units, for organisations that fail to prepare or publish a compliant modern slavery statement or knowingly provide false and misleading information in a statement.
Although the regulations on the NSW Act are yet to be publicly accessible to determine the specific information which organisation will be required to report, is presumed that NSW will accept that the Commonwealth reporting regime is comparable to its own. Nevertheless, it has been stated that the NSW Government desires to harmonise its reporting framework with the Federal reporting regime to prevent duplicating administrative tasks and ensure the reporting obligations will not overlap with the Commonwealth regulations.
Companies that perform well to these requirements, will establish their differentiation in the market when compared to their competition.
Zoic is currently providing advice in NSW to organisations to meet these reporting requirements. Contact email@example.com to discuss how modern slavery legislation may impact your business.