Breaking chains – Unravelling the significance of proposed reforms to the Modern Slavery Act 2018 (Cth) for your business
Following on from our previous article about developments in reporting obligations under the Modern Slavery Act 2018 (NSW), this article provides an update following the Federal Government’s review of the Modern Slavery Act 2018 (Cth) (Act).
The Act came into force on 1 January 2019 and was considered a significant breakthrough in Australia's overall response to modern slavery. Modern slavery refers to situations where coercion, threats or deception is used by offenders to seriously exploit victims. The Act was introduced in response to the global shift in the modern slavery and human rights compliance landscape by introducing a mandatory due diligence framework.
With the 2023-24 financial year reaching its halfway point, it is an opportune time to consider the 2023 review of the Act and its terms to understand, moving forward, what may need to be done to mitigate risks in your supply chains.
Review of the Act
The Act required a review to be conducted three years after it commenced.
On 31 March 2022 the Federal Government initiated a statutory review (Review) of the Act; and as part of the review process, on 25 May 2023 the Attorney General's Department published the McMillan Report (Report) which proposed 30 recommendations for the Federal Government to consider.[1]
What do the review and the Report’s recommendations tell us?
The Review received 136 submissions, 30 responses to the online questionnaire, 496 responses to the online survey, held 38 consultation meetings attended by 285 organisations, and held another 65 meetings with government officers in Australia and abroad.[2] As expected, there appears to be a wide spectrum of opinion on key issues.
Interestingly, the Report noted, amongst other things, that:
‘there is no hard evidence that the Act has caused meaningful change for people living in conditions of modern slavery. Across the thousands of pages of modern slavery statements on the Register for Modern Slavery Statements, there is only a handful of examples of modern slavery incidents being detected or people given specific protection or remedial help’[3] (emphasis added).
To formulate its response to the recommendations, the Federal Government plans to engage in consultations with various stakeholders. The Federal Government has already committed to strengthening support for modern slavery victims and survivors and has prioritised the implementation of its Tackling Modern Slavery package to strengthen the operation of the Act and improve its response to modern slavery even further.[4] [5]
What are some of the key recommendations set out in the Report?
We identify the key recommendations that are likely to affect Australian entities in the table below:
|
Recommendation No. |
Explanation |
|
4 |
Lowering the present threshold of AU$100 million down to AU$50 million. |
|
8 |
Revising the mandatory reporting criteria that would require an entity to report on:
|
|
11 |
Providing that reporting entities must:
|
|
12 |
Allowing for the optional reporting period of 3 years, with an informational update to the full statement provided in the intervening years. |
|
14 |
The Attorney-General’s Department facilitate the submission of an online modern slavery statement (using the template referred to in Recommendation 13 of the Report) through an online portal on the Online Register for Modern Slavery Statements. |
|
20 |
Making it an offence for a reporting entity:
|
|
22 |
The Attorney-General’s Department compile and publish on the Modern Slavery Statements Register, an annual list of entities that have submitted statements that are published on the Register. |
|
24 |
The Attorney-General’s Department examine the practicability of establishing a procedure for the receipt and investigation of complaints from the public regarding entity reporting under the Modern Slavery Act. |
|
27 |
Providing that the Minister or the Anti-Slavery Commissioner may make a written declaration of a region, location, industry, product, supplier or supply chain that is regarded as carrying a high modern slavery risk. |
*Note: the full list of recommendations are outlined under pages 11 to 14 of the Report.
What your business can do now
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Conduct internal awareness training regarding modern slavery and what your organisation is doing to combat it.
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Evaluate the efficacy of your existing due diligence framework, if any, in recognising and evaluating modern slavery risks beyond primary suppliers.
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When preparing modern slavery statements, make sure to liaise with and include all relevant, immediate stakeholders in your organisation, ensuring everyone is on the same page.
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Monitor legislative changes closely.
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Re-assess your organisation’s modern slavery commitments (i.e. consider whether your organisation may be captured by a lower proposed threshold and any penalties that apply for non-compliance under the Act).
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Review existing grievance and remediation frameworks (if any) and consider how they are currently being used and may be improved.
While there is no certainty if the Act will be amended to include any of the recommendations, it is important that companies understand the compliance requirements. This is necessary not only if they are a reporting entity but also if they are part of a supply chain for a customer who is a reporting entity. They may be requested by that customer to report on and address modern slavery issues to meet their own obligations but also as a requirement for doing business with that customer.
Bartier Perry is able to assist you with any queries you have in respect of modern slavery reporting obligations.
Authors: Jason Sprague, Rebecca Hegarty and Robert Lee