Modern Slavery is a term used to describe serious exploitation and can include human trafficking, debt bondage, and forced marriage. Modern slavery is a global problem which can exist along the supply chains of goods and services we use every day. According to Anti-Slavery Australia, it is estimated that 40.3 million people live in modern slavery. In order to combat this, the Modern Slavery Act 2018 (Cth) was enacted.
This legislation requires entities with an annual consolidated revenue of $100million to report annually on the risks of modern slavery in their operations and supply chains, and the actions which can mitigate those risks. That reporting is in the form of a “Modern Slavery Statement”. Entities may also voluntarily provide a Modern Slavery Statement even if they do not meet this criterion.
Requirements for Statement
An entity’s Modern Slavery Statement must address the following main criteria in order to be compliant with the legislation:
- Identify the reporting entity; and
- Describe the structure, operations and supply chains of the reporting entity; and
- Describe the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls; and
- Describe 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; and
- Describe how the reporting entity assesses the effectiveness of such actions; and
- Describe the process of consultation with:
- Any entities that the reporting entity owns or controls; and
- in the case of a reporting entity covered by a statement under section 14—the entity giving the statement; and
- Include any other information that the reporting entity, or the entity giving the statement, considers relevant.
The aim is that each annual statement will build on the last and identify the measures that were effective and how they can be improved.
The legislation requires the Modern Slavery Statement to be approved by the principal governing body of the entity and signed by a responsible member of the entity.
More than One Entity
A Modern Slavery Statement can relate to more than one entity. The legislation provides that where this occurs, the Modern Slavery Statement must be approved by the principal governing body and signed by a responsible member of:
- Each entity; or
- A higher entity that has control or influence over the reporting entity; or
- If it is not practicable to comply with the above, at least one entity covered by statement.
Publication of Statement
The Modern Slavery Statement must then be submitted to the Australian Border Force who in turn publish it to the Modern Slavery Statements Register. Anyone can search the Register and view your statement. As this is a publicly available document, it is important to ensure that any statement is congruent with the practices of the company and represent real commitments.
When to Submit
The Modern Slavery Statement must be submitted within six months from the end of the reporting period. The reporting period is defined as the financial year or other annual accounting period applicable to the entity.
Failure to Comply
If an entity fails to comply with the legislation, the Minister can request an explanation as to the reason for the failure and request that a modern slavery statement be provided within a stated time period. Where an entity fails to comply with the request, the legislation provides that the Minister may publish details of the failure to comply including:
- The identity of the entity/entities involved;
- The date the request was given, and details of any extension given;
- Details of the explanation or remedial action requested, and the period or periods specified in the request; and
- The reasons why the Minister is satisfied that the entity has failed to comply with the request.
It is important that a Modern Slavery Statement be reflective of your company’s commitment to combat modern slavery. Oftentimes what may feel like an effective Modern Slavery Statement can fail to address the criteria or not be compliant. It can be useful to have a third party such as a lawyer to assist to ensure that the Modern Slavery Statement is compliant and will best represent the entity.