Australian Businesses must consider Modern Slavery risks

Some forms of Modern Slavery

By et-oceanianode - 01 January 2019

The Bill had passed both houses of parliament, and the Modern Slavery Act took effect on 1 January 2019.

The law now introduces new obligations for large businesses operating in or from Australia to provide annual reports on the actions they have taken to address the risks of modern slavery in their operations and supply chains.

Chris Crewther MP, Fiona McLeod SC, Dr. David Cooke (Konica Minolta Aust.) and Prof. Jennifer Burn (of UTS and Anti-Slavery Australia) see the act as a very positive step in addressing slavery, servitude, forced labour, deceptive recruiting for labour or services, trafficking in persons, and debt bondage in the business community.

Modern Slavery in the Asia-Pacific region

The importance of addressing modern slavery was recently highlighted in the United Nations report into the Global Estimates of Modern Slavery.  This report estimated that on any given day, approximately 40 million people are victims of modern slavery.

Whilst the report acknowledges that modern slavery occurs in every region of the world, the prevalence of forced labour was highest in the Asia-Pacific region.  Further, the majority of victims in forced labour exist in the supply chains of major modern companies, which highlights a risk of Australian businesses being exposed to modern slavery. See GLOBAL SLAVERY INDEX.

Known Slavery today

The objective of the new Australian law is therefore to address this issue by assisting the business community in Australia to “take proactive and effective actions to address modern slavery”.

New Reporting Requirements

The act seeks to achieve this objective by establishing a new Modern Slavery Reporting Requirement. It is now mandatory that all Australian and foreign entities carrying out business in Australia must submit Modern Slavery Statements (Statements) for every 12 month period where their annual consolidated revenue is at least $100 million AUD. These requirements also apply to Commonwealth corporate entities which meet the threshold, and the Commonwealth will also be required to report on behalf of their non-corporate entities. Entities that do not meet the revenue threshold are still able to opt in and provide their annual public Statements.

These Statements must cover the law’s mandatory criteria by identifying the entity and describing:

  • the entity’s structure, operations and supply chains;
  • the risk of modern slavery practices in the entity’s operations and supply chains;
  • actions the entity has taken to assess and address those risks, including due diligence and remediation processes; and
  • how the entity assesses the effectiveness of those actions.

The Statements must also describe any consultation with other entities and include details of approvals, as well as other relevant information.  The Statements are then to be kept by the Minister in a “Modern Slavery Statements Register”, which may be accessed by the public on the internet.

IOM Warning Poster - please share widely.

While the Modern Slavery Reporting Requirement will only be mandatory for larger businesses at this stage, and there are no financial penalties for non-compliance, a positive “trickle-down” effect is expected as we see greater interrogation and transparency of supply chains and of procurement and risk management processes. Further, businesses will likely be motivated by the reputational risks of ignoring the Requirement. The impact of the reporting obligations will be reviewed in three years.

Many human rights organiztions say it is by far not enough but a first step.

Almost all countries officially have abolished it, more than 40 million people are still trapped in modern slavery.

  • Forced labour
  • Child labour
  • Debt Bondage
  • Trafficking
  • Sex industry
  • Forced and early marriage

This might not sound like the world we think we live in, but it is.

It is a multi-billion dollar industry

Modern Slavery/Contemporary Slavery has reports showing the generation of more than $150 billion dollars annually.

A shocking facts is that according to UNICEF and the ILO, an estimate of 168 million children aged between five and 17 are involved in child labour. Out of these children, 85 million are engaged in what the ILO deems “hazardous work/dangerous work”.

A horrific facts is that girls and women are affected by forced labour, accounting for 99% of victims in the commercial sex industry, and 58% in other sectors. Modern slavery is all around us, but most people don’t even realize it.

MUST WATCH: 10 Countries Most Afflicted By Modern Slavery

(*) Part of this article is based on an earlier publication by Emma Dunlevie and Malvina Hagedorn. - prepared with the assistance of Law Graduate Talisa Juracichas - as well as a Panel Discussion held by Project Respect on the Modern Slavery Bill 2018 (Cth) . For more information please contact Emma Dunlevie or Malvina Hagedorn.