The Modern Slavery Bill 2018 aims to establish a modern slavery reporting requirement to strengthen Australia’s approach to combating modern slavery. Under the Bill, entities with $100 million annual consolidated revenue must prepare a ‘modern slavery statement’ each financial year. The modern slavery statement must identify the reporting entity and describe:
- its structure, operations and supply chains;
- the risks of modern slavery practices in its operations and supply chains, and those of 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, including due diligence and remediation processes. This may include the development of policies and processes to address modern slavery risks, and providing training for staff about modern slavery; and
- the consultation process with entities that the reporting entity owns or controls.
On 12 September 2018, the Bill received its second reading in the House of Representatives. The Labour Party moved a number of amendments:
- the definition of modern slavery exclude forced marriage;
- the Minister be required to report annually to Parliament on compliance by reporting entities, including a list of entities required to report and entities that have failed to report;
- a civil penalty ($210,000) for reporting entities that fail to submit a modern slavery statement within the first two years;
- a civil penalty ($210,000) for reporting entities that fail to submit, or submit inadequate modern slavery statements, to be introduced after two years; and
- the appointment of an Anti-Slavery Commissioner.
These amendments were defeated. The Bill is now before the Senate. It is anticipated that further debate on these matters will occur at the next sitting of the Senate in November 2018.
With this in mind, the Government has moved to address the central issue of non-compliance, introducing into the Senate amendments to improve the operation of key aspects of the Bill, including by leaving the door open for the future introduction of civil penalties. Whether the Government's preparedness to look at penalties in the future is enough to secure passage of the Bill in its current form remains to be seen.
The Government has proposed empowering the responsible Minister to require a suspected non-compliant entity to explain why it has not complied with a modern slavery reporting requirement or to require that entity to undertake specified remedial action. Remedial action may include a requirement to give a modern slavery statement or revise an existing statement to ensure all necessary criteria have been addressed. Reporting entities will have at least 28 days to respond.
If a reporting entity does not comply, the Minister may then publicly identify the entity and disclose:
- the date and details of the request made, including the period for response and any extensions given;
- the reasons why the Minister is satisfied the entity has failed to comply with the request; and
- if the request relates to the entity’s failure to provide a joint modern slavery statement, the identities of the entities covered by that joint statement.
This information could be published on the publically accessible Modern Slavery Statements Register which is proposed by the Bill, or in any other way the Minister considers appropriate.
Any decision by the Minister to identify a non‑compliant entity will be subject to review by the Administrative Appeals Tribunal. This will ensure that a reporting entity that considers it may have been incorrectly publicly identified by the Minister is able to seek a formal review of the Minister's decision.
Other Government amendments
The Government has also proposed that the responsible Minister report annually to the Parliament about the implementation of the legislation. The annual report must include an overview of compliance by entities (e.g. the number of entities that have submitted modern slavery statements) and identify best practice modern slavery reporting.
Another amendment seeks to clarify the focus of the three-year review of the legislation. This review must evaluate the operation of the legislation generally and determine whether amendments are required, including the need for introduction of civil penalties or other compliance mechanisms. No doubt this amendment will attract some debate.