On 1 January 2019, the Modern Slavery Act 2018 (Cth) (Commonwealth Act) commenced, heralding a new statutory modern slavery reporting requirement for larger companies operating in Australia.
Who needs to report?
Entities will need to report under the Commonwealth Act if they are an Australian entity or carry on business in Australia with a minimum annual consolidated revenue of $100 million.
The Modern Slavery Act 2018 (NSW) (NSW Act) is not yet in force and is currently subject to Parliamentary review. On 6 August 2019, the Legislative Council Standing Committee on Social Issues announced an inquiry into the NSW Act. The Committee’s recommendations are due on 14 February 2020. The New South Wales Government will await these recommendations before progressing its response to modern slavery.
What does reporting entail?
Reporting obligations relate to the risk of modern slavery in the operations and supply chain of a reporting entity (and its owned and controlled entities), as well as the steps it has taken to respond to the risks identified.
Unlike other jurisdictions, the reporting criteria in Australia are mandatory. Reporting entities must have a reasonable basis for any opinions expressed in their Modern Slavery statement, so it is important that reporting entities take the time to assess their risk. The reporting criteria can be found here.
What should entities do?
It is crucial that reporting entities begin reviewing their supply chains and operations to comply with the new reporting obligations.
- Design: Design and implement a modern slavery management framework
- Assess: Conduct due diligence on the modern slavery risks in the business supply chain and operations
- Mitigate: Adopt strategies for addressing the identified modern slavery risks
- Remediate: Develop and implement appropriate remediation measures
- Monitor & Review: Monitor and review the effectiveness of the modern slavery risk management framework and processes
- Report: Establish appropriate mechanisms for internal and external reporting
What is the timing?
A modern slavery statement must be submitted within six months after the end of the reporting entity’s financial year. The reporting period is the entity’s first full financial year that commences after 1 January 2019.