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Review of Modern Slavery Act offers recommendations for change

Conflict in business concept with broken chain.

The Report of the statutory review of the Modern Slavery Act conducted by Professor John McMillan AO was tabled in Parliament last month.

The review’s Report comes after the Federal Budget announced $8 million over four years to be directed towards the establishment of an Anti-Slavery Commissioner.

Governance Institutes CEO Megan Motto said the new role, which was part of the Institute’s submission, will be fundamental to supporting compliance and improving practices in supply chains in Australia and abroad.

‘The Commissioner will play an important role in offering guidance to entities as well as educating the wider community about the impacts of modern slavery.’

The Report of the Statutory Review of the Modern Slavery Act 2018 (Cth): The First Three Years (the Report), was the first of the tri-yearly reviews and proposed 30 recommendations to amend the act.

The Institute supports recommendations that include specific guidance on reporting obligations for small and medium-sized entities and the phased approach for mandatory due diligence requirements.

But Ms Motto says the Institute is concerned about the Report’s recommendation to reduce the reporting threshold for entities from a consolidated revenue of at least $100 million to $50 million over its 12-month reporting period.

‘Governance Institute recommended that the Regime threshold should encompass a risk-based approach with reporting concentrated on industries and locations at a higher risk of offences.’

‘Not all entities that qualify under the current reporting threshold have the appropriate resources to report, and many of these entities operate in areas that are at a low risk of modern slavery in their supply chains,’ Ms Motto said.

Recommendation 20 of the Report also proposes amendments to penalties for failing to comply with reporting requirements.

‘We have advocated that the Regime should be for reporting only and therefore, should not be a penalty regime for engaging in activities involving modern slavery, which is already dealt with under the Australian Criminal Code.’

‘We believe that sanctions for non-compliance will have little impact on the wider goals of the Regime.’

The need for good governance on this issue is fundamental, as recent data suggests that modern slavery has grown in Australia. Walk Free’s recent 2023 Modern Slavery Index found that on any given day in 2021, 41,000 people are victims of modern slavery in Australia, an increase of 173% when compared to the 2018 index.

The Report highlighted that in its consultations for the review, there was a widely endorsed view that there is ‘no hard evidence’ that the Act has had a meaningful impact on the lives of those living in modern slavery conditions.

You can find the Government’s full report here.

For more info on compliance, head to our Good Governance Guide on Compliance, which is found in our Resources Centre.

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