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Australia passes Commonwealth legislation targeting modern slavery

Legislation requiring large businesses operating in Australia to report on modern slavery risks in their supply chains has been passed by both houses of the federal government.03 Dec 2018

Once commenced, the 2018 Modern Slavery Bill ('Cth Bill') will apply across Australia. It will require entities that carry on business in Australia and that have a consolidated revenue of at least A$100 million to publish annual public reports on actions taken by them to "address modern slavery risks in their operations and supply chains".

The final legislation contains several amendments from the bill first introduced to the Australian parliament, including new provisions allowing the government to compel companies to explain their reasons for failing to submit a report.

HollyAnn Walters-Quan of Pinsent Masons, the law firm behind Out-Law.com, said: "The sanction contained in the Cth Bill is one of 'naming and shaming', in a public register. Once the Act reaches its three-year mark, it will be interesting to see the minister's report on the Act, particularly in relation to levels of compliance with the provisions and whether additional civil or criminal measures are recommended".

The Cth Bill follows the UK's 2015 Modern Slavery Act. Legislation specific to New South Wales, the 2018 Modern Slavery Act (NSW), was passed in late June 2018, although there is as yet no commencement date for the legislation. The transparency obligations in UK Act itself are currently under review, with recommendations to be presented to the UK home secretary by the end of March 2019.

The Cth Bill was developed following the Joint Standing Committee on Foreign Affairs, Defence and Trade's December 2017 report into establishing a Modern Slavery Act in Australia. However, it does not implement all of the recommendations of that report, most notably around penalties and for the appointment of an anti-slavery commissioner.

The Cth Bill sets out mandatory content for reporting entities' annual modern slavery statements, which goes further than the requirements of the equivalent legislation in the UK. Statements must be approved by a 'principal governing body' of the reporting entity, such as the board of directors; signed by a responsible member of the entity; and given to the government within six months of the end of the reporting entity's financial year. The Cth Bill also requires that a publicly available, free of charge, online register be kept of the modern slavery statements.

An amendment to the Cth Bill allows the minister to request in writing that an entity which has failed to comply with the requirement to provide a modern slavery statement provide an explanation for its failure within 28 days, and potentially to undertake specified remedial action. Details of an entity which fails to comply with a request from the minister may be published in the public register. The entity will have a right of appeal.

The Cth Bill as passed also contains a new requirement for the minister to produce an annual report on compliance with the new requirements and best practices in modern slavery reporting during that year. The minister will also be required to produce a full review of the Act, including whether anything should be done to improve its operation and whether additional measures to improve compliance are needed, three years after its commencement.