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Businesses must consider Modern Slavery risks

Emma Dunlevie and Malvina Hagedorn

Update: The Bill has now passed both houses of parliament, and the Modern Slavery Act will take effect on 1 January 2019.

Last week representatives from Russell Kennedy attended a Panel Discussion held by Project Respect on the Modern Slavery Bill 2018 (Cth) (the Bill). The Bill, which is currently before the Senate and is expected to become law, 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.

Panel Discussion for Modern Slavery

Pictured above: Chris Crewther MP, Fiona McLeod SC, Dr. David Cooke (Konica Minolta Aust.) and Prof. Jennifer Burn (of UTS and Anti-Slavery Australia)

The Bill is seen 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.

The objective of the Bill 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 Bill seeks to achieve this objective by establishing a new Modern Slavery Reporting Requirement. This will mandate 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 Bill’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.

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.


This article has been prepared with the assistance of Law Graduate, Talisa Juracich.

For more information please contact Emma Dunlevie or Malvina Hagedorn.


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