Modern Slavery in Australia – Don’t Get Caught up in Chains
Published on August 28, 2017 by Selwyn Black and Katherine Silvers, Law Clerk
With increasing pressure from consumers, the Australian Government has now announced that it proposes to introduce legislation requiring large businesses to report annually on actions taken to address modern slavery.
Following the release this month of the Modern Slavery in Supply Reporting Requirement Chains Public Consultation Paper, businesses which are likely to be affected by any “Modern Slavery in Supply Chains Reporting Requirement” may begin preparing for the increased transparency requirements.
The Proposed Reporting Requirement
While subject to public consultation, the Federal Government has proposed that the reporting requirement will likely apply to businesses which are headquartered in Australia or entities that have part of their operations in Australia with the reporting threshold to be set no lower than an annual turnover $100 million. It is proposed that entity be defined broadly to include a range of entity types, and therefore any organisation which is covered by the proposed reporting requirement will need to annually report on and publish their actions to address modern slavery in their operations and their supply chains. This will be in the form of an annual Modern Slavery Statement.
It has been proposed that Modern Slavery Statements must address an established set of criteria, substantially based on optional reporting criteria set by the UK, including at minimum information about:
- The entity’s structure, its operations and its supply chains
- The modern slavery risks present in the entity’s operations and supply chains
- The entity’s policies and process to address modern slavery in its operations and supply chains and their effectiveness (such as codes of conduct, supplier contract terms and training for staff), and
- The entity’s due diligence processes relating to modern slavery in its operations and supply chains and their effectiveness.
The Consultation Paper also sets out certain approval, publishing and filing requirements for the Modern Slavery Statements to anchor these requirements in corporate governance and ensure they are publicly accessible and searchable.
Releasing the Shackles – what businesses need to know
Given that the enactment of an Australian Modern Slavery Act is highly likely in the near future, it is desireable to start preparing now.
Based on the current proposal it is our recommendation that businesses begin:
- Understanding and mapping out each element of their supply chains;
- Reviewing existing contracts and policies and identify where any potential slavery issues exist and whether they have been addressed;
- Updating existing policies or formulate new policies to address modern slavery exploitation and the proposed Reporting Requirements
- Identifying and consider conducting requisite audit and due diligence measures to ascertain any operational or supply chain areas where there is a risk of modern slavery
- Considering establishing processes to monitor the effectiveness of steps taken, if any, to ensure modern slavery is not exploited and consider training required to be provided to employees to proactively identify issues and apply any new modern slavery policies and procedures implemented
While conducting due diligence and audits is an onerous exercise, with increasing consumer pressure and media attention any failure to do so may greatly damage a business’ reputation and brand.