Snapshot
- The latest statutory review of the Modern Slavery Act 2018 (Cth) has recommended a number of reforms to the current reporting regime, which (if implemented) will impose tougher requirements on Australian businesses.
- The aim of the Modern Slavery Act is to increase the transparency of modern slavery risks in the operations and supply chains of large Australian businesses.
- It also aims to encourage businesses to effectively address and prevent modern slavery.
The Federal Government recently released the much-anticipated report on the statutory review of the Modern Slavery Act 2018 (Cth) (‘Modern Slavery Act’). The report follows an extensive public consultation process and foreshadows a number of potential reforms to the current reporting regime, which (if implemented) will impose tougher requirements on Australian businesses and give teeth to a regime that currently relies on transparency and corporate goodwill.
The review
The Modern Slavery Act requires entities with AU$100 million or more in annual consolidated revenue to prepare annual reports that identify the risks of modern slavery in their operations and supply chains, and outline the actions taken to address those risks. The aim of the Modern Slavery Act is to increase the transparency of modern slavery risks in the operations and supply chains of large Australian businesses, and to encourage businesses to effectively address and ultimately prevent modern slavery.
The Modern Slavery Act provides for a statutory review three years after its commencement. This review, which was completed earlier in 2023, considered the operation of the Modern Slavery Act during its first three years of operation, compliance with the Act’s requirements, and whether any additional measures are needed to improve compliance.
The ‘Report of the statutory review of the Modern Slavery Act 2018 (Cth): The first three years’ (the ‘Report’), published on 25 May 2023, made a total of 30 recommendations to increase the level of compliance with the Modern Slavery Act, encourage more meaningful disclosures and introduce tougher enforcement measures. These recommendations include:
- introducing a requirement for entities to implement a due diligence system;
- incorporating new mandatory reporting requirements, including the requirement to report instances of modern slavery and explain activity undertaken in accordance with the entity’s due diligence system;
- introducing penalties for specific non-compliance;
- lowering the threshold for reporting entities to AU$50 million; and
- the appointment of a Commonwealth Anti-Slavery Commissioner (included in the May Federal Budget).
