The Modern Slavery Bill: What is the latest?

On 1 January 2019, the Modern Slavery Act commenced, an Act that requires a new statutory modern slavery reporting requirement for larger companies operating in Australia.

Now is the time to start preparing the information required for the first report, which is due either later this year or mid next year, depending on your financial reporting period.

Review the reporting periods here.

There is still time to allow you to ensure you have the right people in place to understand and rigorously scrutinise all aspects of a Supply Chain. It allows all levels of the business to familiarise themselves with the reporting requirements and ensure there are processes in place to fulfil these requirements.

For those for whom Modern Slavery is already a concern, the delay for this Act to come into play is no doubt frustrating. Bringing transparency and rigour to Australian business’s approach to Modern Slavery is the first step to ensuring all Australian products have been made and sourced in a way that does not exploit any vulnerable human.

The introduction of the Modern Slavery Bill is a major stepping stone for Australia in terms of stamping out human exploitation that, too often, is hidden in plain sight. The Bill seeks to cover the activities of both private and public-sector organisations with annual consolidated revenue of more than $100 million (businesses with less than $100m revenue can opt to report voluntarily); requiring that they publish a report every financial year in conjunction with modern slavery regulations. The reporting requirements are as follows:

  1. the identity of the reporting company;
  2. the structure, operations and supply chains of the company;
  3. 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;
  4. the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to asses and address those risks;
  5. how the reporting entity assesses the effectiveness of such actions;
  6. the process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and
  7. any other information that the reporting entity, or the entity giving the statement, considers relevant.

The goal of this report is to force these businesses to scrutinise their supply chain to identify the risk of modern slavery, and outline what they are doing to address these risks. To ensure high-level engagement, the statement has to be approved by the board of directors or equivalent and signed by a director.

So, why is this so important?

The Walk Free Foundation, the publishing organisation of the Global Slavery Index, estimates that on any given day in 2016, 40.3 million people were victims of modern slavery. Of these people, 24.9 million were in forced labour and 15.4 million were in forced marriages. Even more shockingly, 1 in 4 of these victims were children. The majority of countries have laws against modern slavery, but few governments have sought to hold businesses accountable.

As stated by The Minister for Foreign Affairs, Julie Bishop, the purpose of the bill is to “to encourage identification and disclosure of instances of modern slavery, and to clean up supply chains.” Increasing pressure from Government, as well as expectations from employees and customers around corporate social responsibility, is creating changes in the way many do business. By requiring organisations to report each year; identifying the risks in their supply chains, as well as highlighting the due-diligence processes they have in place to assist them in tackling modern slavery, the idea is that negative attention will be drawn to companies who are slacking on their social responsibilities.

By making information such as this public, it is anticipated that customers will hold their suppliers accountable for the entirety of their operations; requiring that they demonstrate that they are not engaging in unethical practices. The modern consumer no longer simply wants the most inexpensive option, they want their dollar to go further and create positive social and environmental impact. This shift, coupled with reporting regulations of the new Bill, will create transparency in companies that may have previously had none; raising expectations of what constitutes ‘good business.’ By creating a new benchmark for success, organisations must willingly demonstrate the integrity of their operations and can no longer plead ignorance when it comes to the darker corners of their supply chains.

Dr Jennifer Burns, the Director of Anti-Slavery Australia at the University of Technology, Sydney, states that slavery is common in Australia’s labour force, particularly within “hospitality, construction and agriculture”. The Supply Chain Sustainability School, functioning both here in Australia and in the UK, is an organisation seeking to target modern slavery in the construction sector. They acknowledge that, while the estimated number of people living in modern slavery conditions in Australia is lower than many other countries, the majority of our supply chains lead directly to the Asia Pacific region, where roughly 30 million people are subject to human trafficking, forced labour and debt bondage.

The purpose of the School is to combat businesses engaging with these illegal and inhuman practices by increasing sustainability knowledge and competency along the construction and infrastructure supply chains. If you’d like to get involved, well we’ve got good news for you! We’re currently hiring a Partner Engagement Manager to help the Supply Chain Sustainability School achieve financial and strategic growth, to assist with their mission of creating a greener, more sustainable construction sector.

Overall, this new commitment to stamping out modern slavery practices will not only help protect the world’s most vulnerable, but raise the bar when it comes to defining corporate success. By acknowledging the importance of this human rights issue, change can be adopted right now to provide every individual with freedom as a basic right.