Modern Day Modern Slavery
- and how to ready your business.
Modern Slavery has quickly become an important and highly visible social issue with governments around the world rushing to develop legislation to effectively deal with the problem.
Modern Slavery generally refers to the exploitation and complete control of another person, often through coercion, violence or deception, rendering that person unable to leave. Modern Slavery is not always as obvious as the traditional idea of slavery, and the wording is left intentionally broad to encompass everything from human trafficking, and indentured servitude to deceptive labour hire practices.
While we may think that we face little risk of Modern Slavery violations in Australia, the reality is that Modern Slavery is especially relevant to the APAC region as over 50% of global Modern Slavery takes place here. A common example seen in many countries including our own is coercion by confiscating an individual’s passport or threatening deportation if illegal work conditions are not accepted without complaint. With profits from forced labour totalling over $150billion US annually, the scale of the issue is huge.
Australia’s Response: What is the Modern Slavery Act?
On the 1st of January 2019, the Modern Slavery Act 2018 (Cth) commenced, ushering in a range of responsibilities and obligations for companies operating in Australia. The legislation, which was passed by our federal government requires businesses with a revenue of greater than $100M to report their supply chain exposure or risks around Modern Slavery.
At the state level, NSW is the only state to develop legislation to address Modern Slavery. The NSW act was passed in 2018, however was deferred by parliament following the enactment of the commonwealth regulations. In its current state, the NSW act:
establishes a commissioner for Modern Slavery,
attaches a $1.1M penalty for violating the requirements of the legislation; and
applies to any organisation with revenue greater than $50M p.a.
How does your business adhere to the Modern Slavery Act?
The commonwealth legislation requires that any qualifying business (revenue greater than $100M p.a.) must submit a Modern Slavery statement to the Minister for Home Affairs, containing:
the identity of the reporting entity;
the structure, operations and supply chains of the reporting entity;
the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls;
the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks;
how the reporting entity assesses the effectiveness of such actions;
the process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and
any other information that the reporting entity, or the entity giving the statement, considers relevant.
This disclosure must be submitted within 6 months of a financial year ending that commenced after 1 January 2019. Organisation must remember not to stop at Tier 1 suppliers, the legislation requires that businesses examine down to their raw material suppliers as described below:
How do I get started?
The challenge facing Australian businesses to iteratively investigate and improve their supply chain is extensive, particularly in high risk industries. However, it is not without precedent and given the work undertaken by many businesses in the UK, the challenge is not insurmountable. The most important thing to remember is to start early as the journey and investigation will take time.
For details on how to get started on understanding your modern slavery supply chain risks, and how to start working towards disclosing in accordance with the legislation, keep an eye out for future blogs, or get in touch!