Update on Australian Modern Slavery Reporting Requirements

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The Australian Government issued a consultation paper on 16 August 2017 seeking industry commentary and feedback on the Government's proposal to create a "Modern Slavery in Supply Chains Reporting Requirement" (Consultation Paper).

The Consultation Paper follows the release of an interim report from a joint parliamentary committee inquiry in August 2017 that considered whether certain modern slavery reporting requirements should be imposed in Australia.

The Consultation Paper states that a regulated reporting requirement is the Government's preferred approach to dealing with modern slavery and its potential occurrence in the supply chains of companies operating in Australia. The reporting requirement will likely be imposed on Australian companies with an annual revenue of over AU$100 million and will require the production of a report, approved by the board of directors, within five months of the end of the Australian financial year. The report is likely to require information about the following key areas:

  • The entity's structures, supply chains and operations
  • The modern slavery risks present in the entity's operations and supply chains
  • The entity's policies and processes to address modern slavery in its operations and supply chains, and the effectiveness of such policies and processes
  • The entity's due diligence processes relating to modern slavery in its operations and supply chains, and the effectiveness of such processes
The Consultation Paper advises that legislation implementing the reporting requirement is proposed to be introduced into Parliament during the first half of 2018.

Responding to exploitation in supply chains was heralded as a key focus in 2014 with the release of Australia’s National Action Plan to Combat Human Trafficking and Slavery 2015-19. As part of that Action Plan, the National Roundtable on Human Trafficking and Slavery established an expert Supply Chains Working Group, bringing together relevant stakeholders from business, civil society and government agencies. The Working Group has since recommended that the Government introduce a slavery reporting requirement. The aim of the slavery reporting requirement is to enable companies to respond more effectively to modern slavery, improve workplace practices, share information to eliminate modern slavery practices, and improve the availability of relevant information to consumers and investors.

Comment: A number of other jurisdictions have implemented varying reporting requirements relating to modern slavery-type practices in supply chains, including: the UK, US (in California), France, the Netherlands and Brazil. The UK's reporting requirements were introduced and implemented under the Modern Slavery Act, 2015 (UK). The Consultation Paper specifically states that any Australian reporting requirements will be harmonised with UK obligations given analogies with the UK market and in order to minimise the need for companies to comply with multiple different regimes across jurisdictions.

Global companies operating in Australia may already be subject to the reporting requirements of the UK Modern Slavery Act and have adequate processes and procedures in place to meet any new reporting requirements that may be introduced by the Government. However, the adequacy of such procedures and processes should be reviewed and tested. Further, Australian companies that may meet the relevant annual revenue thresholds should consider whether effective steps are being taken, through appropriate due diligence processes and policies, to address any modern slavery risks in its relevant supply chains and operations.