Modern Slavery Bill introduced - how will this impact Australian businesses?

In brief

The Modern Slavery Bill has been introduced into Federal Parliament. If it passes, Australian entities, or entities carrying on business in Australia, with at least $100 million global consolidated revenue will be required to submit a statement on risks of modern slavery in their operations and supply chains. We anticipate that the majority of our clients will need to lodge the first statement by 1 January 2021. Partner Rachel Nicolson and Lawyer Holly Woodcroft report.

How this affects you

If the Modern Slavery Bill 2018 (Cth) (the Bill)  passes, the first statement on risks of modern slavery must be lodged within six months of the end of the reporting period in which the legislation comes into effect. All statements will be publicly available on a Modern Slavery Statements Register.

Under the current form of the Bill, a reporting entity may issue a modern slavery statement on behalf of any other reporting entities it owns or controls, so long as it consults with the board, or equivalent, of those other reporting entities and includes in its statement a description of the consultation. Statements must include:

• the structure, operations, and supply chain of the reporting entity, and any other reporting entity it is reporting on behalf of;
• if risks of modern slavery are identified, description of the risks and remedial steps the reporting entity is taking to address these risks, including how effectiveness of the remedial steps is measured; and
• if no risks are identified, description of any due diligence or preventative practices in regards to modern slavery, including how effectiveness of those actions is measured. 

This follows the passing on 21 June 2018 of the Modern Slavery Bill 2018 (NSW), which applies to entities that are not required to report under the federal law and have at least $50 million annual turnover and at least one employee in NSW. While this has not yet been clarified, we anticipate that entities reporting under the federal legislation will also be able to report on behalf of subsidiaries captured by the NSW legislation that are not captured by the federal legislation (ie those with an annual turnover of between $50 million and $100 million). Watch this space.

Next steps

For more information on obligations you may have under the Modern Slavery Bill 2018, see our Focus: Australian Modern Slavery Act: Final report recommends mandatory supply chain reporting with penalties for non-compliance.

We are advising a number of clients on this issue. Please contact us if we can be of assistance.