Plans to mandate a modern slavery reporting requirement

Posted by on 12/09/2017

The government has released a consultation paper on its proposed model for reporting on modern slavery in supply chains.

According to the paper, the government plans to require businesses with total annual revenues of at least $100 million to publish annual statements outlining their actions to address modern slavery in their operations and supply chains.

This requirement will apply to all entities headquartered in Australia, or entities that have any part of their operations in Australia, and is expected to affect around 2,000 organisations.

To ensure that companies aren’t forced to comply with inconsistent regulations across jurisdictions, the proposed reporting requirement will compel entities to report against almost the same criteria set by the UK’s reporting requirement.

However, while reporting against criteria is optional in the UK, Australian entities will have to report against a set of four criteria that cover all the UK’s optional criteria.

At a minimum, the government suggests that an entity’s Modern Slavery Statement should include information about:

  1. the entity’s structure, its operations and its supply chains
  2. the modern slavery risks present in the entity’s operations and supply chains
  3. the entity’s policies and processes to address modern slavery in its operations and supply chains and their effectiveness (such as codes of conduct, supplier contract terms and training for staff)
  4. the entity’s due diligence processes relating to modern slavery in its operations and supply chains and their effectiveness.

Minister for Justice Michael Keenan believes the proposed reporting requirement will raise business awareness of this issue, create a level playing field for businesses to share information about what they are doing to eliminate modern slavery and encourage businesses to use their market influence to improve workplace standards and practices.

‘Importantly, the proposed reporting requirement will also improve information available to consumers and investors about modern slavery,’ he says.

According to the consultation paper, up to 45.8 million people are estimated to be victims of modern slavery worldwide.

The International Labour Organization estimates that around 21 million people globally are held in forced labour alone. Of these, more than half are exploited in the Asia-Pacific region.

In addition, a 2015 study by the Ashridge Centre for Business and Sustainability at Hult International Business School and the Ethical Trading Initiative found that 71 per cent of companies believe there is a likelihood of modern slavery occurring at some point within their supply chains.

Meanwhile, in August, a sub-committee of the Parliament’s Joint Standing Committee on Foreign Affairs, Defence and Trade tabled its interim report for an inquiry into establishing a Modern Slavery Act in Australia.

The sub-committee is investigating whether elements of the UK Modern Slavery Act 2015 could be introduced in Australia, particularly the UK’s reporting requirement.

Its interim report summarises the evidence heard so far on reporting. It states that there is strong support from businesses, unions and NGOs for reporting requirements as well as for an Independent Anti-Slavery Commissioner. It also recommends that the government consider introducing a Modern Slavery Act.

The sub-committee’s inquiry into modern slavery continues with public hearings being held around the country. Its final report will address other issues such as support for victims, Australia’s visa framework and orphanage trafficking.

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