On 28 June 2018, the Assistant Minister for Home Affairs, the Hon Alex Hawke MP, tabled the Modern Slavery Bill 2018 in Parliament.
Modern Slavery reporting for businesses
The new reporting regime will have a significant impact on larger businesses operating in or from Australia, including insurers and their insureds:
- The Modern Slavery Bill requires businesses based, or operating, in Australia, which have an annual consolidated revenue of more than $100 million, to report annually on the risks of modern slavery in their operations and supply chains and actions to address those risks. Entities not caught by this threshold can opt in.
- The Bill applies to large commercial organisations including Commonwealth corporate entities. The Commonwealth Government will also need to report on behalf of non-corporate Commonwealth entities.
- Under the Bill, businesses will be required annually to submit a “modern slavery statement” that complies with mandatory criteria.
- Statements will be available to the public on a government-run register of modern slavery statements.
Click here for more details of the Bill and what businesses should do to respond.
How will the new reporting regime impact on businesses?
The new reporting regime will impact significantly on the way that Australian businesses deal with their suppliers, contractors and customers. Reporting entities will need to act quickly to get ready to comply with the new regime and smaller suppliers will also be affected.
Businesses that operate in Australia and already report under UK laws may find it easier to comply with the Australian reporting requirements, but they will still need to watch out for differences in the two regimes and adapt their reporting accordingly – this includes verifying that they have complied with the Australian mandatory criteria.
Although the Commonwealth reporting regime is currently targeted at larger businesses – those with annual gross consolidated revenue of at least $100 million – there will inevitably be a “trickle‑down” effect as reporting entities seek information and understanding from their group entities and suppliers about the modern slavery risks in their supply chains and how best to manage them. Suppliers to the Commonwealth Government ought to expect that their modern slavery strategies will be interrogated as agencies develop their own response to the Act.
In addition, businesses with at least $50 million in annual consolidated revenue and one or more employees in New South Wales will need to comply with the NSW Modern Slavery Act, which was passed on 21 June 2018. See our update here.
These new reporting requirements will impose a regulatory burden on many insurers and their insureds, but there are opportunities too. Reporting entities can use the opportunity to review their procurement and risk management processes and check whether they are effective in identifying and addressing not just modern slavery risks but other legal, commercial and reputational risks in their operations and supply chains.
This continues to be a complex undertaking and we anticipate the new reporting regimes will prompt businesses to create new and innovative ways to help them better understand and manage their risks and safeguard their supply chains.
When is the Bill expected to come into force?
The Bill will be debated from August and is expected to come into force by the end of 2018, with the first reporting period anticipated to commence from about 1 January 2020.
Want to know more?
For more information about the Bill or what companies are doing to manage their supply chain risks, check out our global best practice and human rights research here or contact us.