The Modern Slavery Act 2018 (Cth) (Commonwealth MSA) came into force on 1 January 2019. Australian entities and international entities that carry on business in Australia (Reporting Entities) with an annual consolidated revenue of AUD100 million or more must report under the Commonwealth MSA annually.
The Commonwealth MSA prescribes mandatory reporting obligations, which require Reporting Entities to identify risks of modern slavery in their operations and supply chains. The reporting criteria are:
- identify each relevant Reporting Entity;
- describe the structure, operations and supply chains of each Reporting Entity;
- describe the risks of modern slavery practices in the operations and supply chains of each Reporting Entity and any entities each Reporting Entity owns or controls;
- describe the actions taken by each Reporting Entity, and any entity it owns or controls, to assess and address those risks, including due diligence and remediation processes (this expressly includes training);
- describe how each entity assesses the effectiveness of its actions;
- describe the process of consultation with any entities each Reporting Entity owns or controls and, if the statement is given jointly with other entities, the entities giving the statement.
The obligation on Reporting Entities to describe their modern slavery risk (in relation to their operations and supply chains and those of their owned or controlled entities) has driven significant change in corporate behaviour. It has resulted in a broad adoption of supplier questionnaires and other means of conducting due diligence on suppliers, to enable Reporting Entities to describe the risks. It has also resulted in widespread adoption of modern slavery and human rights policies and procedures, including modern slavery/human rights obligations in supply agreements. Larger entities and governments are driving change in smaller entities by adopting procurement processes that require suppliers to demonstrate their commitment to managing their human rights impacts.
Global entities are conscious that the Australian legislation has mandatory reporting criteria which means that Australian modern slavery statements tend to provide more detail to consumers, business partners and other stakeholders in relation to their human rights commitment. As a result, the statements are being reviewed at global head offices as well as in Australia before being approved. There is significant pressure from commentators to improve statements and practices year-on-year, including comparative scoring.
Statements are published and made publicly available on the Australian Government’s Modern Slavery Register.
The Modern Slavery Amendment (Australian Anti-Slavery Commissioner) Bill 2023 passed the House of Representatives on 28 May 2024 and received royal assent on 11 June 2024. This will result in the appointment of a Commonwealth Anti-Slavery Commissioner (Commissioner) as an independent statutory office holder within the Attorney-General’s portfolio.
It is anticipated that the Commissioner will play a vital role in raising awareness about modern slavery at a national level, engaging with federal government agencies, and helping to shape the implementation of future modern slavery reforms by the federal government.
The Commissioner’s functions will include:
- supporting Australian entities and entities carrying on business in Australia to address risks of modern slavery practices in their operations and supply chains;
- engaging with, and promoting engagement with, victims of modern slavery to inform measures for addressing modern slavery;
- supporting, encouraging, and conducting education and community awareness initiatives relating to modern slavery.
Despite the longstanding calls from NGOs and academia for the Commissioner to have stronger powers, the Commissioner will not have investigative or enforcement powers. However, there remains scope for the Commissioner’s functions and powers to evolve over time.
It is anticipated that the Commissioner will, in due course, develop guidance material and resources for the business community to support their compliance with the Modern Slavery Act 2018 (Cth). In conjunction with the detailed due diligence material and codes of practice published by the NSW Anti-slavery Commissioner, we see greater clarity on the horizon in terms of the expectations of governments, increased awareness of modern slavery within the business community, and possibly the resumption of the ‘race to the top’.
State
New South Wales is the only state or territory in Australia with their own modern slavery reporting regime, the Modern Slavery Act 2018 (NSW) (NSW Act). The NSW Act commenced on 1 January 2022, requiring NSW government agencies to take reasonable steps to avoid modern slavery in the supply chain of goods and services they acquire. However the reporting regime in the NSW Act only applies to NSW government agencies. This means that private sector businesses in NSW only need comply with the reporting regime under the Commonwealth MSA.
The NSW Act also empowers the NSW Anti-slavery Commissioner, the NSW Procurement Board, and the NSW Auditor-General to oversee efforts to remove products of modern slavery from public procurement. Dr James Cockayne was appointed the NSW Anti-slavery Commissioner for a five-year term and commenced in this role in 2022. The Commissioner has broad oversight over Government policies addressing modern slavery, the development and publication of codes of practice to provide guidance, and maintaining a public register that identifies any government agency failing to comply with the directions of the NSW Procurement Board, any state owned corporations not reporting under the NSW Act, and any other information that the Commissioner considers appropriate.
Other states and territories have ethical procurement strategies in place.
