What the passing of the Modern Slavery Bill will mean for businesses

The Modern Slavery Bill, introduced to the Legal and Constitutional Affairs Legislation Committee last month, could see significant changes for businesses if it becomes federal law, writes Rob Jackson.

Emma Musgrave • 23 July 2018 • Politics

passing of the Modern Slavery Bill, scales of justice

Why do we need laws to combat slavery in the 21 st century?

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In Australia, since 2004 there have been reports of over 350 suspected victims in a range of industries, including domestic service (including in embassies), hospitality, construction and the sex industry.
The Global Slavery Index estimates there are approximately 4,300 people trapped in modern slavery in Australia, while the United Nations estimates some 40 million people are affected by slavery, with half those located in our Asia-Pacific region.

What will the obligations be, when the Modern Slavery Bill becomes law?

Any entity that “carries on business in Australia” with an annual revenue greater than $100 million will be required report annually on the risks of modern slavery in their operations and supply chains.
This obligation is set out in the Modern Slavery Reporting Requirement which requires a reporting entity to file a Modern Slavery Statement (MSM) for any year that consolidated revenue is above $100 million.
Any entity, not otherwise obliged by the law, may volunteer to file an MSM.
The MSM must consider operations on a global basis, not just Australia, and include the supply chain and address the following key key criteria:
- reporting entity’s structure, operations and supply chains;
- risks identified in the operations and supply chains;
- actions taken to assess and address risk;
- the effectiveness of those actions; and any other information considered relevant.
The MSM will be registered on a free, publicly accessible website that will host the Modern Slavery Statements Register to promote transparency and the effectiveness of the Modern Slavery Reporting Requirement.

How extensive is the obligation?

It is predicted that 3,000 businesses will be obliged to file an MSM, in addition to the Commonwealth government and its agencies.

The government has committed $3.6 million in its 2018 budget to establish a dedicated modern slavery business engagement unit within the Department of Home Affairs.

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The operation of the act will be reviewed after three years.

Meanwhile in NSW

NSW enacted its own Modern Slavery Act on 21 June 2018. If a business has one employee in that state it will be covered by broadly equivalent provisions. While it will overlap with the proposed Commonwealth Bill, there are some differences, including:

A business with a turnover of $50 million or more must file an annual modern slavery statement.
An anti-slavery commissioner will be appointed to oversee and uphold the legislation, a feature that is absent from the Commonwealth initiative.
There are financial penalties of up to $1.1 million in contrast to the proposed Commonwealth law, which will have to rely on naming and shaming those businesses, which do not comply. Offences cover failure to file a statement, when obliged to do so, or failing to publicise a statement, or for giving misleading information.
There is a small business exemption for the first 18 months if an employer has fewer than 20 employees.

Next steps

If businesses have a turnover of at least $50 million and one employee in NSW, then they are already covered by state law. If not, and revenue is in the region of $100 million within a group of companies, then the Commonwealth obligation will apply.

Rob Jackson is a partner in Rigby Cooke’s workplace relations team.

Emma Musgrave

Emma Musgrave (née Ryan) is the managing editor, professional services at Momentum Media.

Emma has worked for Momentum Media since 2015, including five years spent as the editor of the company's legal brand - Lawyers Weekly. Throughout her time at Momentum, she has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.

Prior to joining Momentum Media, Emma worked in breakfast radio, delivering news to the Central West region of NSW, before taking on a radio journalist role at Southern Cross Austereo, based in Townsville, North Queensland.

She holds a Bachelor of Communications (Journalism) degree from Charles Sturt University.

Email Emma on: Emma.Musgrave@momentummedia.com.au

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