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Modern Slavery Act 2018

What You Need To Know About the Modern Slavery Act 2018

The Modern Slavery Act 2018 (Cth) (the ‘Act’) entered into force on 1 January 2019 and its aim is to combat modern slavery in global supply chains.

Modern slavery describes situations of serious exploitation and can include situations of human trafficking, slavery, servitude, forced labour, debt bondage, forced marriage and child labour. It describes situations where coercion, threats or deception are used to exploit workers and undermine or deprive them of their freedom.

The reporting requirement under the Act requires that entities in the Australian business community identify and address their modern slavery risks and maintain responsible and transparent supply chains. Entities must prepare annual Modern Slavery act 2018 Statements which address their responsibilities which are published by the Australian Government through an online central register.

1. Who needs to report?

The Act applies to Australian entities and foreign entities carrying on business in Australia.

The Act requires that entities based or operating in Australia which have an annual consolidated revenue of more than $100 million to report annually on the risks of modern slavery in their operations and supply chains and the actions to address those risks.

There are seven mandatory criteria for the content of statements. These criteria require entities to explain their actions to access and address modern slavery risks in their operations and supply chains.

2. What has to be reported?

Companies are required to report any possible points of worker exploitation in their operations and supply chain. They must also provide measures on how to make sure these situations never arise.

3. What do companies have to do?

  • Establish possible gaps where exploitation can occur
  • Create a framework that prevents exploitation
  • Assess if the framework is sufficient in stopping exploitation
  • Revise strategies to make the framework more efficient
  • Implement framework
  • Monitor efficiency

4. Board Approval

 Statements must be approved by the principal governing body of the entity and signed by a member of that body.

Why is this necessary? Here are the numbers:

In 2018, The Walk Free Foundation has found that:

  • Over 40 million people globally are subject to some form of modern-day slavery, and that forced labour alone creates about $150B in profits yearly;
  • Around 25 million people in the Asia-Pacific are considered to be “enslaved”

The Australian Government estimates there were 1,567 modern slavery victims in Australia between 2015 and 2017.

Entities have a responsibility to respect human rights in their operations and supply chains as set out in the United Nations Guiding Principles on Business and Human Rights which are the recognised global standard for preventing and addressing business-related human rights harm. 

By improving transparency about modern slavery, the reporting requirement will increase business awareness of modern slavery risks. The focus on large businesses will help to drive change through supply chains and an increased awareness of the responsibility of business to respect human rights.

The Australian Government will review the Act after three years as to its effectiveness. The Australian Government must also report annually to Parliament on the implementation of the Act.

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Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.

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