The Modern Slavery Bill 2018 has been passed by both Federal and NSW Parliaments that introduces significant reforms to supply chain transparency legislation.
Modern Slavery in a supply chain includes where people are forced into prostitution, or forced to work for low wages in construction, sweatshops or food supply chains. It can also include underpayment of wages, denied visa extensions by employers or being forced to live in squalid accommodation.
New South Wales Legislation
In June 2018, NSW introduced the Modern Slavery Act 2018 (NSW) which requires that each financial year, commercial organisations (associations and corporations) that operate in NSW publish a modern slavery statement. The reporting requirements apply to commercial organisations that:
- Have total annual turnover of at least $50 million;
- Have employees in NSW;
- Supply goods and services for profit or gain;
- Are not a NSW government agency.
The types of information that may be disclosed in the statement include: the due diligence processes of the organisation and its supply chains that mitigate modern slavery; the locations the organisation and its supply chains operate in, which carry a risk of modern slavery practices and any training available to employees on modern slavery.
Companies that fail to comply with the reporting requirements may be liable to a penalty of up to $1.1 million.
Supply chain is not defined and so will be defined according to its ordinary meaning in the context of your business.
FEDERAL LEGISLATION
On the 28 June 2018, the Federal Parliament passed a corresponding Modern Slavery Bill 2018 which is yet to be implemented into Federal legislation.
Similar to the NSW Bill, each financial year, Australian entities or those carrying business in Australia at any time, will be required to publish a modern slavery statement. The reporting requirements apply to companies:
- With a total annual turnover of at least $100 million;
- Are Australian residents, trusts, limited partnerships that are Australian residents and other partnerships or entities that are either incorporated within Australia or the control of the entity is in Australia.
The Bill mandates disclosure of the following information in the modern slavery statement:
- the structure, operations and supply chains;
- the risks of modern slavery practices in its operations, supply chains and any other entities it owns or controls;
- the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks, including due diligence and remediation processes. This may include the development of policies and processes to address modern slavery risks, and providing training for staff about modern slavery; and
- the effectiveness of those actions taken.
Under the Federal Bill, no penalty is currently proposed on entities who fail to comply with the reporting requirements.
Contact Your HRmanager for assistance in meeting your obligations set out by the new reforms, including undertaking an audit of pay rates and penalties; developing a Modern Slavery Statement; signing an annual audit and providing an independent letter indicating your organisation’s compliance.