Bills Digest No. 12,
2018–19
PDF version [806KB]
Cat Barker
Foreign Affairs, Defence and Security Section
16
August 2018
Contents
The Bills
Digest at a glance
Purpose of
the Bill
Background
Committee
consideration
Policy
position of non-government parties/independents
Position of
major interest groups
Financial
implications
Statement of
Compatibility with Human Rights
Key issues
and provisions
Concluding
comments
Date introduced: 28
June 2018
House: House of
Representatives
Portfolio: Home
Affairs
Commencement: Sections
1 and 2 on Royal Assent; substantive provisions on Proclamation or six months
after Royal Assent, whichever occurs first.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the Federal
Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at
August 2018.
The Bills Digest at a glance
Purpose of the Bill
The Bill will require around 3,000 entities based or
operating in Australia to prepare annual statements on potential modern slavery
risks in their operations and supply chains, and the steps they have taken to
address those risks.
Background
Modern slavery is a term used to refer to a range of
exploitative practices including slavery and slavery-like practices/conditions
(such as debt bondage, servitude, forced marriage and forced labour) and human
trafficking (also referred to as trafficking in persons). The most recent
global estimate of the extent of modern slavery was that on any given day,
around 40 million people were victims of modern slavery. While the
estimated prevalence of modern slavery in Australia is comparatively low, it is
likely that modern slavery also exists in the supply chains for goods and
services sold in Australia and by Australian companies.
Key elements
Australian entities (including corporate Commonwealth
entities and Commonwealth companies) with annual revenue of $100 million
or more, and foreign entities operating in Australia with annual revenue of
$100 million or more, will be required to submit annual modern slavery
statements to the responsible Minister. Entities with lower annual revenue may voluntarily
provide statements. The Minister will be required to prepare annual modern
slavery statements covering all non-corporate Commonwealth entities.
All statements will be made publicly available in an
online register.
The scheme will be reviewed after three years, and a
report on the review will be tabled in Parliament.
Key issues
A modern slavery reporting requirement was recommended by
the Joint Standing Committee on Foreign Affairs, Defence and Trade and is
supported by the Australian Labor Party and the Australian Greens. It also has
strong support from both private sector and civil society stakeholders. However,
there is disagreement on:
-
the revenue threshold at which it should become mandatory
for an entity to provide a modern slavery statement—most private sector
stakeholders favour the threshold proposed in the Bill or higher, while most
civil society stakeholders and the Greens would prefer a threshold of $50–60
million or lower and
-
the need for compliance measures—most private sector
stakeholders oppose the inclusion of penalties for non-compliance with
reporting requirements, while most civil society stakeholders, Labor and the
Greens argue that without them, the supposedly mandatory reporting requirements
in the Bill are rendered voluntary.
Many stakeholders have expressed their disappointment that
the Bill does not provide for an Independent Anti-Slavery Commissioner and will
not require the Government to publish a list of entities required to report
(such a list would greatly assist in identifying entities that have failed to
report).
Purpose of
the Bill
The purpose of the Modern Slavery Bill 2018 is to establish
a modern slavery reporting requirement. Annual statements will be required
from:
-
Australian entities (including corporate Commonwealth entities
and Commonwealth companies) with annual revenue of $100 million or more
- foreign
entities operating in Australia with annual revenue of $100 million or
more and
- the
Australian Government.
Entities with lower annual revenue may voluntarily provide
statements.
The statements will be required to include information on
the entity’s structure, operations and supply chains; potential modern slavery
risks in those operations and supply chains; actions the entity has taken to
assess and address the risks identified; and how the entity assesses the
effectiveness of those actions.
The statements will be made publicly available in an
online register.
Background
Modern slavery
Modern slavery is a term used to refer to a range of
exploitative practices including slavery and slavery-like practices/conditions
(such as debt bondage, servitude, forced marriage and forced labour) and human
trafficking (also referred to as trafficking in persons).[1]
The clandestine nature of modern slavery means that it is
difficult to obtain reliable data on its extent both at the global level and in
Australia. In both contexts, there are wide discrepancies both between the
estimates of different organisations and between those estimates and officially
detected cases. The most recent global estimate of the extent of modern
slavery, compiled by the International Labour Organization (ILO) and Walk Free
Foundation, in partnership with the International Organization on Migration,
was published in September 2017. The report estimated that on any given
day in 2016, around 40.3 million people globally (or 5.4 per 1,000
people) were victims of modern slavery—24.9 million in some form of forced
labour, and 15.4 million in forced marriage.[2]
A 2018 report that provided estimates by country included Australia among the
countries with the lowest estimated prevalence of slavery; it estimated that 0.6 persons
in Australia per 1,000 of Australia’s population was subject to modern slavery
(equating to approximately 15,000 people).[3]
Australian Government response
The Government launched the National Action Plan to
Combat Human Trafficking and Slavery 2015–19 on 2 December 2014.[4]
Like the previous Australian plan, it is built around four ‘pillars’:
prevention and deterrence, detection and investigation, prosecution and
compliance and victim support and protection.[5]
Development of the plan involved consultation with a range
of government and non-government stakeholders, including through the National
Roundtable on Human Trafficking and Slavery. It identifies seven key areas of
focus for the period it covers:
-
continuing monitoring of the impact of the 2013 legislative
amendments to the Commonwealth Criminal Code Act 1995 (the Criminal
Code) including on investigations and prosecutions and victim support
-
increasing awareness-raising and education for vulnerable groups,
frontline responders and the general community
-
refining our response to forced marriage, including our service
response to people in, or at risk of forced marriage
-
considering our response to labour exploitation in supply chains
-
finalising operational protocols for our response to minors
-
strengthening our connectedness with the States and Territories,
and
- continuing our leadership internationally, and enhancing regional
cooperation to combat human trafficking and slavery, including through the Bali
Process on People Smuggling, Trafficking in Persons and Related Transnational
Crime.[6]
Components of the Government’s response include the
legislative framework (most notably, the offences for slavery and slavery-like
practices and trafficking in persons in Divisions 270 and 271 of the Criminal Code Act
1995 (Criminal Code)); investigation and prosecution of offences
(including specialist teams in the Australian Federal Police (AFP)); the Support
for Trafficked People Program administered by the Department of Social Services
and delivered by the Australian Red Cross; the Human Trafficking Visa
Framework; work with the non-government sector; a research program at the
Australian Institute of Criminology; international and regional engagement; and
a specific aid program, the Australia-Asia Program to Combat Trafficking in
Persons (focused on Southeast Asia).[7]
Supply chain reporting
While the estimated prevalence of modern slavery in
Australia is comparatively low, it is likely that modern slavery also exists in
the supply chains for goods and services sold in Australia and by Australian
companies:
... In a globalised economy and increasingly interconnected
world, there is a high risk that Australian businesses’ operations and supply
chains may be tainted by modern slavery ...
...
The complexity of formal and informal economies means that
modern slavery can be present at all stages of the supply chain and in many
different settings. For example, entities like corporations, charities and
universities may be exposed to modern slavery risks through direct suppliers in
the formal economy. These entities may also be indirectly exposed to modern
slavery through trusts, investments and extended supply chains that involve
informal economic activities. Internationally, key industries of concern
include agriculture, construction, electronics, fashion, hospitality and
extractives ...
...
... Both small and large businesses can be exposed to modern
slavery risks. However, the size and complexity of large entities’ operations
can increase their possible vulnerability. Other types of entities such as
universities and hospitals that have large supply chains or significant
investments may also be exposed to modern slavery risks.[8]
Noting such risks, and actions taken or underway in other
countries to address them, the Joint Standing Committee on Foreign Affairs,
Defence and Trade (JSC on FADT) recommended in June 2013 that the Australian
Government undertake a review in consultation with relevant stakeholders to
establish anti-trafficking and anti-slavery mechanisms appropriate to the
Australian context with a view to:
-
introducing legislation to improve transparency in supply chains;
-
the development of a labelling and certification strategy for
products and services that have been produced ethically; and
-
increasing the prominence of fair trade in Australia.[9]
The Government established a working group to examine ways
to address human trafficking and related practices in supply chains, and in
November 2016 announced that it would undertake further work on the issue,
building on the working group’s recommendations.[10]
In February 2017, the JSC on FADT commenced an
inquiry into establishing a Modern Slavery Act in Australia, at the request of
then Attorney-General, George Brandis.[11]
While that inquiry was underway, the Government commenced public consultations
on introducing a requirement for organisations operating in Australia to report
annually on their efforts to address modern slavery in their operations and
supply chains.[12]
The reporting requirements in the Bill largely reflect the model proposed in
the consultation paper, which differed in some respects to the model later
recommended by the JSC on FADT. The main differences between the model proposed
in the consultation paper and that in the Bill are that the Bill will require
the Australian Government itself to publish annual modern slavery statements
and will allow joint statements covering multiple related entities.
The JSC on FADT reported on its inquiry into establishing
a Modern Slavery Act in December 2017.[13]
The Committee made 49 recommendations, 13 of which related to improving
transparency in supply chains.[14]
The extent to which different elements of the Bill implement recommendations
related to reporting on modern slavery in supply chains is noted in the ‘Key
issues and provisions’ section of this Digest. The Bill is largely consistent
with the JSC on FADT’s recommendations, the main exceptions being that the Bill
proposes a higher revenue threshold for mandatory reporting, does not include
penalties and compliance measures for entities that fail to report, and will
not require the Government to publish a list of entities required to report.
The Government allocated funding in the 2018–19 Budget to
establish an Anti-Slavery Business Engagement Unit in the Department of Home
Affairs (DoHA) to manage implementation of the new reporting requirement,
including a central repository of modern slavery statements, and provide advice
to organisations on modern slavery risks.[15]
United Kingdom scheme
In developing the reporting requirements included in the
Bill, the Government took account of measures in overseas jurisdictions aimed
at strengthening responses to modern slavery and other human rights abuses in
supply chains.[16]
The United Kingdom became the first country to introduce national modern
slavery reporting requirements covering all sectors through the Modern Slavery
Act 2015 (UK)(UK Act).[17]
The UK Act requires each commercial organisation with a total annual
turnover of £36 million (approximately A$63 million) or more to
publish an annual statement outlining the steps it has taken to ensure that
slavery and human trafficking is not taking place in its business or any of its
supply chains. The UK Act and its operation to date were closely
considered by the Government and the JSC on FADT. The reporting requirements in
the Bill are broadly comparable to those in the UK Act, but the Bill specifies
a higher revenue threshold for mandatory reporting, and goes further than the UK
Act by specifying mandatory reporting criteria, requiring the Australian
Government to report and establishing a government-funded publicly accessible
register of modern slavery statements.
New South Wales scheme
In June 2018, New South Wales became the first
Australian jurisdiction to enact a modern slavery reporting requirement. The Modern Slavery
Act 2018 (NSW) (NSW Act) had not commenced as at the date of
publication of this Digest.[18]
The NSW Act will require each commercial organisation with a total
annual turnover of $50 million or more that has employees in NSW to
publish annual modern slavery statements outlining the steps it has taken to
ensure that its goods and services are not a product of supply chains in which
modern slavery is taking place.[19]
The reporting requirement will not apply to an organisation if it is subject to
obligations under a Commonwealth law or a law of another state or territory
that is prescribed as a corresponding law.[20]
An organisation that fails to prepare a compliant modern slavery statement or
fails to publish a statement faces a maximum penalty of 10,000 penalty units (currently
$1.1 million).[21]
A person who provides information that they know, or ought reasonably to know,
is false or misleading in a material particular in connection with a modern
slavery statement faces the same maximum penalty.[22]
The NSW Act will also require NSW Government
agencies to take reasonable steps to ensure that goods and services they
procure are not the product of modern slavery.[23]
Under the NSW Act, a public register to be
maintained by an independent Anti-slavery Commissioner will identify:
-
any commercial organisation that has disclosed that its goods or
services are, or may be, a product of supply chains in which modern slavery may
be taking place, and whether the organisation has taken steps to address the
concern and
-
any NSW Government agency that fails to comply with directions
concerning procurement of goods and services that are the product of modern
slavery, and whether the agency has taken steps to ensure compliance in the
future.[24]
The ‘Key issues and provisions’ section of this Digest
compares key elements of the Bill with the UK Act and NSW Act.
Committee
consideration
Previous consideration
As noted under ‘Background’ above, introducing a modern slavery
reporting requirement was recommended by the JSC on FADT in December 2017.
Senate Legal and Constitutional
Affairs Committee
The Bill has been referred to the Senate Legal and
Constitutional Affairs Committee for inquiry and report by 24 August 2018.
Details of the inquiry are at the inquiry
homepage.
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills made
no comment on the Bill.[25]
Policy
position of non-government parties/independents
The Australian Labor Party (ALP) and the Australian Greens
support the introduction of a modern slavery reporting requirement. However, both
parties consider that there should be penalties for non-compliance and that an
Independent Modern Slavery Commissioner should be established instead of a Modern
Slavery Business Engagement Unit in DoHA.[26]
The ALP committed to establishing reporting requirements
and associated penalties, and an Independent Commissioner, in 2017.[27]
The Greens called for consideration of a lower threshold
for mandatory reporting, such as entities with annual revenue of $25 million
or more.[28]
At the time of publication of this Bills Digest, there was
no public indication of the policy position of any other non-government parties
and independents on the Bill.
Position of
major interest groups
There is strong support from both private sector and civil
society stakeholders for the introduction of a modern slavery reporting
requirement.[29]
Key points of difference in stakeholder views concern:
-
the revenue threshold at which it becomes mandatory for an
entity to provide a modern slavery statement, in particular:
- most
private sector stakeholders favour the threshold proposed in the Bill
($100 million) or a higher threshold and
- most
civil society stakeholders favour a threshold of $50–60 million or lower and
-
whether the Bill should include compliance measures, such
as penalties for failing to report, in particular:
- most
private sector stakeholders opposed the inclusion of penalties (which are not
proposed in the Bill), arguing that reputational risk and consumer and investor
pressure are more effective and
- most
civil society stakeholders supported the inclusion of penalties, arguing that
without them, the supposedly mandatory reporting requirements are rendered
voluntary.[30]
Many stakeholders expressed their disappointment that the
Bill does not provide for an Independent Anti-Slavery Commissioner.[31]
The JSC on FADT recommended that the Government legislate for an Independent
Anti-Slavery Commissioner to, amongst other things, oversee implementation of
the National Action Plan, engage with government and organisations on the modern
slavery reporting requirement, undertake legislated reviews of a proposed
broader Modern Slavery Act at least every three years, and provide independent
oversight of the response to modern slavery across all sectors and identify
gaps and solutions.[32]
Its recommendation was informed by the existence of such an office in the UK.[33]
The Parliamentary Joint Committee on Law Enforcement has also recommended that
the Government consider appointing an Anti-Slavery and Trafficking
Commissioner.[34]
Further information is provided in the ‘Key issues and
provisions’ section of this Digest.
Financial
implications
Government
The Bill itself will not have a financial impact on
Government revenue.[35]
However, its implementation will. The Government allocated $3.6 million over
four years in the 2018–19 Budget for the establishment of an Anti-Slavery
Business Engagement Unit (BEU) in DoHA to ‘provide expert support and advice to
business on modern slavery risks’ and manage a central repository of modern
slavery statements.[36]
Adequacy of funding
Stakeholders have emphasised the importance of adequate
funding for the BEU to the operation of the reporting scheme, with some
questioning whether the funding allocated so far would be sufficient:
Given the budget of the Modern Slavery Business Engagement
Unit is $3.6 million over the forward estimates, that works out at five staff
from our understanding. With around 3,000 reporting entities under the existing
threshold definition that means a ratio of one staff member to 600 reporting entities.
That is already a significant stretch for those staff, even if their only task
was making reporting entities aware they have an obligation to report.[37]
The Advisory Committee of the Modern Slavery Registry
considered the introduction of the reporting requirement should be supported by
a public awareness campaign:
The impact of the Modern Slavery Reporting Requirement relies
largely on the power of public scrutiny, particularly by investors and civil
society, to induce companies to comply. A comprehensive public awareness
campaign is essential to generate public awareness about the new reporting
requirement and to ensure that the power of public scrutiny is adequately
harnessed so as to achieve greater legislative impact and, ultimately,
effectiveness.[38]
Such a campaign would require funding beyond that provided
for the BEU.
Private sector
Based on the minimum reasonable cost for complying with
the Bill, the Government estimates that it will cost the private sector a total
of $65.85 million on average per year. This estimate is based on a revenue
threshold of $100 million, under which approximately 3000 entities would
be required to report, with an average cost per entity of $21,950.[39]
The Housing Industry Association pointed out that these estimates do not
include the costs incurred by businesses in the supply chains of reporting
entities that are not themselves required to submit statements, but which may
need to supply information to reporting entities.[40]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[41]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights had not
reported on the Bill at the date of publication of this Digest.[42]
Key issues
and provisions
How will modern slavery be defined?
Clause 4 will set
out definitions for the purpose of the Act. Modern slavery will
mean conduct that would constitute:
-
an offence under Division 270 or 271 of the Criminal Code
(these divisions contain offences for slavery, servitude, forced labour,
deceptive recruiting for labour or services, forced marriage, debt bondage,
trafficking in persons, trafficking in children, organ trafficking and
harbouring a victim)
- an
offence under either of those Divisions, if the conduct had taken place in
Australia
-
trafficking in persons, as defined in Article 3 of the Protocol
to Prevent, Suppress and Punish Trafficking in Persons, especially Women and
Children:
the recruitment, transportation, transfer, harbouring or
receipt of persons, by means of the threat or use of force or other forms of
coercion, of abduction, of fraud, of deception, of the abuse of power or of a
position of vulnerability or of the giving or receiving of payments or benefits
to achieve the consent of a person having control over another person, for the
purpose of exploitation[43]
or
-
the worst forms of child labour, as defined in Article 3 of the ILO
Convention (No. 182) concerning the Prohibition and Immediate Action for
the Elimination of the Worst Forms of Child Labour:
(a) all forms
of slavery or practices similar to slavery, such as the sale and trafficking of
children, debt bondage and serfdom and forced or compulsory labour, including
forced or compulsory recruitment of children for use in armed conflict;
(b) the use,
procuring or offering of a child for prostitution, for the production of
pornography or for pornographic performances;
(c) the use,
procuring or offering of a child for illicit activities, in particular for the
production and trafficking of drugs as defined in the relevant international
treaties;
(d) work
which, by its nature or the circumstances in which it is carried out, is likely
to harm the health, safety or morals of children.[44]
Inclusion of forced marriage in
definition
In its consultation paper, the Government proposed that
the definition of modern slavery would ‘exclude practices such as forced
marriage that are unlikely to be present in business operations and supply
chains’.[45]
However, the definition in the Bill includes forced marriage. Several
stakeholders have recommended an amendment to exclude forced marriage from the
definition. The Federation of Ethnic Communities Councils of Australia and
others considered that in most contexts, forced marriage is more appropriately
dealt with as a manifestation of family and domestic violence than as a form of
modern slavery.[46]
Stakeholders also questioned the ability of reporting entities to identify
forced marriage in their operations and supply chains and the appropriateness
of making them responsible for the private conduct of employees, contractors
and suppliers.[47]
Who will be required to report?
Annual modern slavery
statements will be required from:
- Australian entities that have consolidated
revenue of at least $100 million for the reporting period[48]
- entities that carry on business in Australia
at any time in the reporting period and have consolidated revenue of at least
$100 million for the reporting period[49]
-
corporate Commonwealth entities and Commonwealth companies that
have consolidated revenue of at least $100 million for the reporting period
- the
Commonwealth and
-
Australian entities and entities carrying on business in
Australia that have volunteered to comply with the Act for the reporting
period.[50]
In accordance with the JSC on FADT’s recommendations, entity
is defined broadly.[51]
Clause 4 will provide that the term has the same meaning as in the Income Tax
Assessment Act 1997, in which it is defined to include an individual, a
body corporate, a body politic, a partnership, any other unincorporated
association or body of persons (except for a non‑entity joint venture), a
trust, a superannuation fund and an approved deposit fund.[52]
Corporate Commonwealth entities and Commonwealth companies
that meet the revenue threshold will be required to report in their own right.
The responsible Minister (currently the Assistant Minister for Home Affairs) will
be required to provide statements that cover all non-corporate Commonwealth
entities.[53]
In this sense, the proposed scheme is broader than both the UK and NSW schemes,
both of which only require statements from ‘commercial organisations’, though
the NSW scheme does require NSW Government agencies to take reasonable steps to
ensure that goods and services they procure are not the product of modern
slavery.[54]
The requirement for the Government to submit modern slavery reports accords
with the JSC on FADT’s recommendations and has been welcomed by private sector
and civil society stakeholders.[55]
Revenue threshold for mandatory
reporting
The Bill will require entities to provide modern slavery
statements if they have a consolidated revenue of at least $100 million
for the reporting period.[56]
The Government considers that this threshold ensures that the scheme ‘focuses
on entities that have the capacity to meaningfully comply and the market
influence to clean up global supply chains’.[57]
Based on its proposed threshold, the Government estimates that around 3,000
entities will be required to report.[58]
The JSC on FADT recommended a threshold of
$50 million, partly on the basis of consistency with the UK threshold
(currently set at £36 million annual turnover).[59]
The NSW Act, the Bill for which was introduced after the JSC on FADT reported,
includes a threshold of $50 million.[60]
The NSW Government does not appear to have provided a detailed rationale for
the $50 million threshold. In her second reading speech, the Premier
recognised that the threshold may mean that the reporting requirement would
capture some organisations that the NSW Government would regard as small
businesses on account of having fewer than 20 employees, and advised that small
businesses would be exempt for the first 18 months of the scheme’s
operation.[61]
Support for proposed or higher threshold
Most private sector stakeholders favour the threshold
included in the Bill or higher.[62]
For example, the Australian Chamber of Commerce and Industry (ACCI) had earlier
advocated imposing reporting obligations only on the top 100–200 companies
operating in Australia.[63]
In its submission to the inquiry into the Bill, the ACCI stated that the
proposed threshold is lower than it believes is appropriate, and noted the
flow-on impacts for smaller entities:
Imposing a reporting obligation on operations with $100M
revenue impacts them, but it also impacts their suppliers, smaller entities
supplying into their output, or indirectly supplying as a second or lower tier
supplier.
... The Committee should not focus solely on direct reporting
entities in considering the impact of this legislation; for each reporting
entity there will be potentially dozens of often smaller operations that will
be called on to do the same due diligence and risk assessment.[64]
The Business Council of Australia (BCA), Australian
Industry Group and the Australian Retailers Association support the
$100 million threshold proposed in the Bill.[65]
The proposed threshold is also supported by some civil
society stakeholders, including the Walk Free Foundation, the Salvation Army
and the Justice and International Mission of the Uniting Church Synod of
Victoria and Tasmania.[66]
The Walk Free Foundation had previously advocated for a lower threshold, but
stated that DoHA’s rationale and evidence that around 3,000 entities would be
required to report had convinced it that the proposed threshold is an
appropriate starting point and ‘will provide an opportunity to avoid the
problems experienced in the UK where the overreach of scope has undermined
impact and compliance’.[67]
The Justice and International Mission considered:
... To make government action meaningful, the threshold should
be set at a level where very high compliance is both possible and likely and
matched by government allocation of staff to follow up with businesses to ask
for their compliance.
...
... A higher threshold with less reporting entities should mean
a much higher compliance rate should be possible. It would be better to start
with a higher threshold and establish a high level of reporting compliance with
fewer entities and then lower the threshold over time, while maintaining a high
compliance rate, than start with a low threshold and very high levels of
non-compliance as has been the case in the UK.[68]
Proposals for a lower threshold
and/or inclusion of high-risk industries
Most civil society stakeholders preferred a lower
threshold of $50–60 million, with some advocating for a threshold of
$25 million or no minimum threshold at all.[69]
In its submission to the Government’s public consultation, the Advisory
Committee of the Modern Slavery Registry stated that it did not consider a
threshold of $100 million would be sufficient to drive meaningful change:
We understand that a threshold of $100 million would result
in the proposed provisions applying to approximately 2,000 entities. These
2,000 entities will likely represent the very largest of commercial entities
operating in Australia, many of whom may already be required to publish an
annual Slavery and Human Trafficking Statement in compliance with the UK Modern
Slavery Act or, given their size and available resources, are likely to have
commenced the process of implementing internal measures to address slavery in
their operations and supply chains.
The aim of the proposed Australian legislation should be to
drive change by encouraging those entities that are lagging on human rights to
improve their performance and raise themselves to meet the standards of leading
businesses. Achieving certainty and a consistently level legislative playing
field for companies operating around the world should be a priority. A lower
threshold, more closely aligned with that imposed by the UK Modern Slavery Act,
would have a significantly broader reach than that currently proposed in
Australia. The proposed legislation will require sufficiently broad application
in order to encourage laggards to act and drive meaningful change in corporate
efforts to address slavery.[70]
A threshold of $50–60 million was advocated by some
stakeholders, including the Australian Human Rights Commission, Law Council of
Australia (LCA) and members of the University of Western Australia Modern
Slavery Research Network, mainly on the basis of consistency with the JSC on
FADT’s recommendation and the thresholds in the UK and NSW Acts.[71]
Others, including Anti-Slavery Australia, Project Respect and Human Rights
Watch suggested a threshold of $25 million, which would align with the
definition of large proprietary company and associated reporting requirements
in the Corporations
Act 2001.[72]
Some stakeholders considered that the revenue-based threshold
should be replaced or supplemented with reporting obligations based on risk
(such as the inclusion of high-risk industries regardless of revenue).[73]
DoHA response
DoHA addressed calls for a lower threshold in its
submission to the inquiry into the Bill:
Alternate revenue thresholds were considered in developing
the Bill. Lowering the revenue threshold would significantly increase the
number of reporting entities. This would limit Government and civil society’s
ability to advise and support reporting entities, ensure reporting entities are
aware of their obligations and monitor the quality of statements. Importantly,
feedback from the consultations indicates that a substantial number of entities
that meet the $100 million revenue threshold will require intensive support to
manage their reporting obligations. A lower reporting threshold would impose a
significant burden on entities that have limited capacity to comply with their
reporting obligations. For example, smaller entities may not have dedicated
sustainability teams or access to internal legal counsel. These smaller
entities are also less likely to be able to influence supplier practices.[74]
It also noted that at least 26 Australian entities had
reported under the UK Act, all of which would also meet the threshold
proposed in the Bill, and stated that it considered that a risk-based reporting
scheme could be confusing and complex, as well as difficult to monitor.[75]
How the threshold is set
Further to the threshold itself is the issue of how it is
set. The consultation paper proposed that the revenue threshold would be set by
regulation ‘to allow for periodic adjustments if required’.[76]
Instead, the threshold has been specified in the Bill, meaning the threshold
could only be changed by amending the Act.
Voluntary compliance
While modern slavery statements will be mandatory for
entities with revenues above the threshold, entities with smaller revenues may
join the scheme voluntarily. This accords with the JSC on FADT’s
recommendations.[77]
An entity wishing to opt into the scheme may do so by giving written notice to
the Minister before the end of the reporting period (or the earliest reporting
period if more than one) in a manner and form approved by the Minister.[78]
The entity may revoke such a notice only by giving written notice to the
Minister before the start of the reporting period (or the earliest
reporting period if more than one).[79]
This restriction is intended to prevent entities from opting out during a
reporting period to avoid reporting on modern slavery risks identified in that
period.[80]
What must be reported?
Modern slavery statements will be able to cover a single
reporting entity or two or more entities (joint modern slavery statements).[81]
For each reporting entity covered by a modern slavery statement, the statement
will be required to:
- identify
the reporting entity
- describe:
- the
structure, operations and supply chains of the entity
- the
risks of modern slavery practices in the operations and supply chains of the
entity and any entities it owns or controls
- the
actions that the entity and any entities it owns or controls have taken to assess
and address the risks identified, including due diligence and remediation processes
- how
the entity assesses the effectiveness of those actions and
- the
consultation process with any entities the entity owns or controls and
-
include any other information that the reporting entity or the
entity giving the statement considers relevant.[82]
If the statement is a joint modern slavery statement, it
must also describe the process of consultation between the entity giving the
statement and each reporting entity covered.[83]
All modern slavery statements except for those prepared
for the Commonwealth by the Minister must also include details of the approval
of the statement (see further below).[84]
The required content of modern slavery statements is
broadly consistent with the JSC on FADT’s recommendations.[85]
It is also broadly comparable to the information that organisations may
include in statements made under the UK Act (which was considered by the
JSC on FADT) and the information that the regulations may require be included
in statements made under the NSW scheme.[86]
Guidance on modern slavery
statements
The Government has committed to developing and publishing
clear and detailed guidance and awareness raising materials on the new
reporting requirements before the Act commences:
The Australian Government anticipates this will include a
reporting template, best-practice examples and information about how the
business community can remedy and report instances of modern slavery identified
in their supply chains or operations. The guidance will also support smaller
entities to ‘opt in’ to the reporting requirement. Government will develop this
guidance in consultation with the business community and civil society and will
make the guidance available as soon as practicable, prior to the reporting
requirement taking effect.[87]
The guidance will explain and clarify key terms such as
‘risks’, ‘operations’, ‘supply chains’, ‘due diligence’ and ‘remediation
processes’, for which the Bill does not include definitions. The Government has
taken this approach to ‘provide flexibility by ensuring different terms can be
appropriately applied to the broad range of reporting entities, with varying
structures’ that will be reporting.[88]
While these terms are not defined in the Bill, the Explanatory Memorandum
provides high-level explanations of what the terms are intended to capture.
‘Supply chains’ is ‘intended to refer to the products and services that
contribute to the entity’s own products and services and is not restricted to
“tier one” or direct suppliers’.[89]
When will statements be required?
Reporting entities will be required to provide statements
within six months of the end of the reporting period.[90]
Reporting period will mean the financial year, ‘or another annual
accounting period applicable to the entity’, which starts after the scheme
commences.[91]
The Explanatory Memorandum states that this flexibility has been provided to
minimise the regulatory impact of the Bill.[92]
Who must approve statements?
Statements for single reporting entities will require the
approval of the entity’s principal governing entity (such as a
board of a company) and the signature of a responsible member of
the entity (such as an authorised member of the board).[93]
Joint statements will require the approval of the
principal governing body of:
- each
reporting entity covered by the statement or
-
an entity that is in a position, directly or indirectly, to
influence or control each reporting entity covered by the
statement or
-
if it is not practicable to comply with either of the above, at
least one reporting entity covered by the statement.[94]
Joint statements will require the signature of a
responsible member of:
- each
reporting entity covered by the statement
- the
entity in a positon to influence or control each reporting entity covered by
the statement or
- each
reporting entity that approved the statement.[95]
These approval requirements are consistent with the JSC on
FADT’s recommendations and comparable to those in the UK Act.[96]
Will reports be publicly available?
Statements provided to the Minister must be published.
However, the Government will not be publishing a list of entities required to
report, meaning it will not be clear which organisations are failing to comply.
Clause 18 will require the Minister to maintain
a register of modern slavery statements, to be known as the Modern Slavery
Statements Register, and to make the register available for public inspection,
without charge, on the internet.[97]
The JSC on FADT recommended that modern slavery statements
be required to be made publicly available:
-
by reporting entities (on their website, or in an annual report
or other publicly available document) and
- in
a legislated and government-funded central repository administered by one or
more NGOs.[98]
The JSC on FADT noted that submitters to its inquiry had
pointed to the lack of a government-supported central repository of statements
as a factor limiting the effectiveness of the UK scheme and that most
submitters, including those from the UK, strongly supported a central
repository.[99]
No list of entities required to
report
The JSC FADT also recommended that the Government publish,
alongside a central repository, lists of entities:
- for
which modern slavery statements are mandatory
- that
have reported as required and
- that
have reported voluntarily.[100]
The JSC on FADT made that recommendation on the basis of submitters
arguing that the lack of information on which organisations were subject to
reporting requirements undermined the effectiveness of the UK scheme by making
it difficult to determine the extent of compliance.[101]
The Bill will not require the Government to publish any of the above lists.
Given the lack of penalties for failing to report (see
further below), a list of entities required to report that can be compared to
the register of modern slavery statements could provide a valuable means of
holding organisations to account. Public scrutiny and investor and consumer
pressure (the intended drivers of compliance) can only be effective if the
public has a way of determining which organisations have failed to report.[102]
The Government has stated that it will not be publishing a
list and ‘does not hold sufficient information to compile an accurate list of
all entities required to report’.[103]
DoHA stated that careful consideration had been given to whether existing
Government lists could be used, but no suitable source had been identified, and
therefore significant resources would be required to maintain an accurate list.[104]
How will reporting obligations be
enforced?
Reporting entities must provide modern slavery statements
to the Minister within six months of the end of each reporting period, and statements
must include the mandatory criteria set out in the Bill.[105]
However, the Bill does not include any means for these requirements to be
enforced, such as penalties for non-compliance (whether in the form of fines or
otherwise, such as exclusion from eligibility for government contracts).[106]
The ALP, ACTU and civil society stakeholders have expressed their
disappointment in this aspect of the Bill.[107]
NSW and UK schemes
Under the NSW Act, maximum penalties of 10,000
penalty units (currently $1.1 million) apply to an organisation that fails
to prepare a compliant modern slavery statement or fails to make its modern slavery
statement public in accordance with the regulations, and a person who provides
false or misleading information in connection with a modern slavery statement.[108]
The only compliance mechanism available under the UK Act is enforcement
of the reporting requirement through an injunction, which the Home Secretary
may seek from the High Court.[109]
JSC on FADT recommendation
The JSC recommended that the Government introduce
penalties and compliance measures for entities that fail to report, applying
from the second year of reporting onwards, and that compliance measures should
include publishing a list of entities above the threshold that fail to report
(from the second year onwards). It also recommended that as part of the first
three-yearly review of the scheme, consideration be given to whether penalties should
be introduced for entities failing to adequately report on the mandatory
criteria and failing to take sufficient action on modern slavery identified in their
supply chains.[110]
Government rationale for not
including compliance measures
The Government stated that the reporting requirement is ‘intended
to facilitate a collaborative “race to the top” amongst business and punitive
penalties may lead to a tick box compliance approach from reporting entities’.[111]
A spokesperson for the Assistant Minister for Home Affairs was quoted as
stating: ‘Business feedback indicates the primary driver for compliance will be
investor pressure and reputational costs and benefits ... This will drive
compliance more effectively than legislated penalties’.[112]
The Government also considers that there is ‘a risk that penalties may limit
Government’s ability to foster a collaborative, multi-stakeholder approach to
combating modern slavery’, but did indicate that ‘the feasibility of
non-punitive measures to encourage compliance’ was being considered, including
the possibility of requiring reporting entities to certify that they had
complied with the reporting requirement to be eligible for Commonwealth tenders.[113]
Differing positions on whether
penalties should apply for non-compliance
Most private sector stakeholders have argued against the
inclusion of penalties for non-compliance.[114]
For example, BCA considered:
Legislation that is punitive or has an excessive focus on
compliance would be costly and it would fail to recognise the active role
businesses have already taken in this area. It risks driving compliance
behaviours (a ‘tick and flick’ approach to reporting) which will limit the
effectiveness of the statements and would be counter to the intent of the
legislation.[115]
The Australian Industry Group argued:
The UK model importantly contains no punitive penalties for
non-compliance with reporting, but relies on public scrutiny to hold companies
to account. A similar approach should be adopted in Australia under any
reporting regime.[116]
In contrast, most civil society stakeholders supported the
inclusion of penalties for non-compliance.[117]
For example, the LCA argued that ‘without penalties, a mandatory reporting
requirement is rendered merely aspirational, as there is no enforcement
mechanism, nor any consequence for non-compliance’; further:
While the Law Council appreciates that there may be
reputational costs for non-compliance, the ability and willingness of civil
society to identify noncompliant entities, the media to expose them, and
consumers to react appropriately, are easily overstated. In addition,
reputational risk does not apply equally to all entities, but mostly to
consumer-facing entities.[118]
The Human Rights Law Centre pointed to the low rate of
compliance with the UK scheme in making the case for penalties for
non-compliance with the reporting requirements in the Bill:
... the failure to include penalties for non-compliance in the
UK has led to extremely low rates of reporting ... and even fewer reporting
against all of the recommended criteria. It is clear that the threat of
reputational damage alone is not a sufficient incentive to ensure compliance,
particularly for businesses whose public profile, scale, services or products
are not reputation-sensitive.[119]
The UK’s Independent Anti-Slavery Commissioner stated in
April 2018 that compliance with the UK Act’s reporting requirements
had been ‘patchy at best’:
While some companies are showing leadership, others are
producing generic statements with little substantive detail or failing to
produce them at all. In 2017, 43 of the FTSE 100 failed to be compliant with
the basic requirements of this legislation.[120]
Coverage of Commonwealth and NSW
schemes
As noted earlier in this Digest, the NSW Act
includes an exemption for organisations subject to reporting obligations under
a Commonwealth law or a law of another state or territory that is prescribed as
a corresponding law. This appears to have been included in anticipation of the
Commonwealth scheme. If the scheme to be established by the Bill is prescribed
as a corresponding law, commercial organisations with employees in NSW with
annual revenue of $50–100 million will be subject to the NSW Act
and could face penalties for failing to report, while those with annual revenue
of $100 million or more will be subject to the Commonwealth scheme and could
not be penalised for failing to report. This appears to be a somewhat perverse
outcome.
An argument could be raised that the Bill intends to cover
the field on this issue, at least in relation to the obligations imposed on
commercial entities.[121]
If such an argument was successful and the NSW Act was viewed as
regulating the field that the Commonwealth intended to cover, the validity of
the NSW Act would be impacted due to the operation of section 109 of the
Constitution.[122]
Review of the scheme
Clause 24 will require the Minister to cause a
report to be prepared that reviews the operation of the Act and any associated
rules over the period of three years from commencement, and whether the Act or
rules should be amended. The review must begin as soon as practicable after that
three-year point, and be completed within 12 months. The Minister will be
required to table the report in each House of Parliament within 15 sitting
days.[123]
The Bill will not require the Minister to appoint a person
to conduct an independent review, meaning the review could be undertaken by the
department administering the reporting requirement (currently DoHA).
Consideration could be given to whether it would be preferable to require the Minister
to appoint an independent reviewer or panel of reviewers, as suggested by
Monash University academics.[124]
Some stakeholders have suggested that clause 24
should list specific matters to be considered by the review, such as the extent
of compliance and quality of reporting, whether guidance issued by the BEU was
effective in supporting reporting entities to meet their obligations, the
impact of the Act, whether the mandatory threshold should be lowered and, if
they are not initially included in the Act, whether penalties for
non-compliance should be introduced.[125]
Some also recommended that the Bill be amended to require reviews of the Act
every three to five years instead of a
one-off review.[126]
Concluding comments
Introduction of a modern slavery reporting requirement has
strong support among private sector and civil society stakeholders and parliamentarians.
The scheme proposed in the Bill improves on the UK scheme by specifying
mandatory reporting criteria, requiring the Australian Government to report and
establishing a government-funded publicly accessible register of modern slavery
statements. It might be further strengthened by including compliance measures
and requiring the publication of a list of entities required to report based on
the revenue threshold. While some stakeholders have called for a lower
mandatory reporting threshold, it might be preferable to focus on supporting
high levels of compliance among a smaller group of entities in the first
instance, with consideration given to lowering the threshold once the scheme
has been established and reviewed.
[1]. Slavery,
slavery-like practices and trafficking in persons have particular meanings
under international treaties and domestic laws implementing Australia’s
international obligations as a party to those treaties. Key international
instruments include: International
Convention to Suppress the Slave Trade and Slavery, done at Geneva on
25 September 1926, [1927], ATS 11 (entered into force for Australia
18 June 1927); Supplementary
Convention on the Abolition of Slavery, the Slave Trade, and Institutions and
Practices Similar to Slavery, done at Geneva on
7 September 1956, [1958] ATS 3 (entered into force for Australia 6 January 1958);
Protocol
to Prevent, Suppress and Punish Trafficking in Persons, especially Women and
Children, supplementing the United Nations Convention against Transnational
Organized Crime done at New York on 15 November 2000 [2005], ATS 27
(entered into force in Australia on 14 October 2005). These obligations are
implemented domestically primarily through Divisions 270 and 271 of the Criminal Code Act
1995 (Criminal Code).
[2]. International
Labour Organization (ILO) and Walk Free Foundation (WFF), Global
estimates of modern slavery: forced labour and forced marriage, ILO and
WFF, Geneva, 19 September 2017, pp. 9–10.
[3]. WFF,
Global
Slavery Index 2018, Minderoo Foundation Pty Ltd, 2018, pp. 180–1.
For information on referrals received by the Australian Federal Police relating
to human trafficking and slavery-like offences, prosecutions and convictions,
and individuals referred to the Support for Trafficked People Program, see the
annual reports of the Interdepartmental Committee on Human Trafficking and
Slavery, available at: Department of Home Affairs, ‘Australia's
response to human trafficking’, Department of Home Affairs website (the
most recent report available at the date of publication of this Digest covered
2015–16).
[4]. Australian Government, National
action plan to combat human trafficking and slavery 2015–19,
Commonwealth of Australia, 2014; M Keenan (Minister for Justice),
K Andrews (Minister for Community Services) and M Cash (Minister Assisting
the Prime Minister for Women), New
measures to tackle human trafficking, slavery and forced marriage,
media release, 2 December 2014.
[5]. The current plan succeeds the 2004
Action
plan to eradicate trafficking in persons. While there were not specific
action plans released in the intervening period, successive Australian
governments continued to pursue an anti-people trafficking strategy with the
same key elements.
[6]. Australian Government, National
action plan to combat human trafficking and slavery 2015–19,
op. cit., p. 2.
[7]. Ibid.,
pp. 15–7, 82–6; Interdepartmental Committee on Human Trafficking and
Slavery, Trafficking
in persons: the Australian Government response
1 July 2015–30 June 2016, Australian Government,
2016. On international and regional engagement and aid, see further: Department
of Foreign Affairs and Trade, Amplifying
our impact: Australia’s international strategy to combat human trafficking and
slavery, Australian Government, 2016.
[8]. Regulatory
Impact Statement (appended to the Explanatory
Memorandum, Modern Slavery Bill 2018), pp. 36–37.
[9]. Joint
Standing Committee on Foreign Affairs, Defence and Trade (JSC on FADT), Trading
lives: modern day human trafficking, Commonwealth of Australia,
June 2013, Canberra, pp. 90–2 (Recommendation 7).
[10]. Australian
Government, Australian
Government response to the Joint Standing Committee on Foreign Affairs, Defence
and Trade committee report: Trading lives: modern day human trafficking,
July 2014; M Keenan (Minister for Justice), Working
with business and civil society to target human trafficking and slavery,
media release, 28 November 2016.
[11]. JSC
on FADT, ‘Inquiry
into establishing a Modern Slavery Act in Australia’, Inquiry homepage.
[12]. M
Keenan (Minister for Justice) and C Crewther, Proposed
new laws to help end modern slavery, media release,
16 August 2017; Attorney-General’s Department (AGD), Modern
slavery in supply chains reporting requirement: public consultation paper and
regulatory impact statement, Australian Government, August 2017.
Submissions to the consultation are available at: Department of Home Affairs
(DoHA), ‘Modern
slavery reporting requirement—public consultation’, DoHA website (many
stakeholders made similar submissions to the JSC on FADT and in response to the
consultation paper). The consultation paper was released the day before the JSC
on FADT tabled an interim report in which the Committee gave its
in-principle support for ‘mandatory annual modern slavery supply chain
reporting requirements to apply, above a particular threshold, to companies,
businesses, organisations (including religious organisations) and governments
operating in Australia’: JSC on FADT, Modern
slavery and global supply chains, Commonwealth of Australia, Canberra,
August 2017, p. xvii.
[13]. JSC
on FADT, Hidden
in plain sight: an inquiry into establishing a Modern Slavery Act in Australia,
Commonwealth of Australia, Canberra, December 2017.
[14]. Other
recommendations related to matters to be covered by a Modern Slavery Act,
defining and measuring modern slavery, establishing an Independent Anti-Slavery
Commissioner, support for victims, criminal justice responses, measures to
address ‘orphanage trafficking’, and measures to address labour exploitation in
Australia. The Government had not tabled a response to the report as at the
date of publication of this Digest. DoHA’s submission to the inquiry into the
Bill stated that the Government ‘is currently coordinating a formal response to
the full report and recommendations’: DoHA, Submission
to Senate Standing Committee on Legal and Constitutional Affairs (L&C
Committee), Inquiry into the Modern Slavery Bill 2018, [Submission no.
79], n.d., p. 3.
[15]. A
Hawke (Assistant Minister for Home Affairs), Government
strengthens Australia's response to modern slavery, media release,
10 May 2018.
[16]. AGD,
Modern
slavery in supply chains reporting requirement, op. cit.,
pp. 8–9.
[17]. Modern Slavery
Act 2015 (UK), section 54 and The Modern
Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015,
regulation 2. The Act also consolidated and updated offences (Part 1),
introduced two types of civil preventative order (Part 2), maritime
enforcement powers in relation to ships (Part 3) and measures focused on
supporting and protecting victims (Part 5), and established the office of
the Independent Anti-slavery Commissioner (Part 4).
[18]. Modern Slavery
Act 2018 (NSW). The Act will commence on a day or days specified by
proclamation (section 2). The Act will also provide for the appointment of
an independent Anti-slavery Commissioner (Part 2), the establishment of a
parliamentary committee on modern slavery (Division 4 of Part 2 and
Schedule 1), and modern slavery risk orders, which a court will be able to
impose on persons convicted of slavery and human trafficking offences under the
Crimes Act 1900 (NSW) or the Commonwealth Criminal Code if
satisfied of certain matters (Part 4).
[19]. Ibid.,
section 24.
[20]. Ibid.,
subsection 24(9).
[21]. Ibid.,
subsections 24(2) and (6); Crimes
(Sentencing Procedure) Act 1999 (NSW), section 17.
[22]. Ibid.,
subsection 24(7).
[23]. Modern Slavery
Act 2018 (NSW), section 25 and amendments to the Public Works
and Procurement Act 1912 (NSW) at item 5.6 of Schedule 5 to the Modern
Slavery Act 2018 (NSW) (not yet commenced and accordingly not reflected in
the compilation of the Public Works and Procurement Act latter at the
date of publication of this Digest). The Modern Slavery Act 2018 (NSW)
also includes amendments to the Public Finance
and Audit Act 1983 (NSW) at item 5.5 of Schedule 5 to the Modern
Slavery Act 2018 (again not yet commenced and accordingly not reflected in
the compilation Public Finance and Audit Act at the date of publication
of this Digest) giving the Auditor-General powers to conduct modern slavery
audits of government agencies.
[24]. Modern Slavery
Act 2018 (NSW), section 26.
[25]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2018, The Senate, 15 August 2018, p. 36.
[26]. C
O’Neil (Shadow Minister for Justice), Labor
demands strong slavery laws, media release, 28 June 2018; C
O’Neil (Shadow Minister for Justice), Modern
Slavery Act must contain penalties, media release,
10 May 2018; C O’Neil (Shadow Minister for Justice) and L Singh, Government
must act on slavery, media release, 15 December 2017;
Australian Greens, Additional
comments, JSC on FADT, Hidden in plain sight: an inquiry into
establishing a Modern Slavery Act in Australia, Commonwealth of Australia,
December 2017.
[27]. B
Shorten (Leader of the Opposition) and C O’Neil (Shadow Minister for Justice), Labor
taking action on modern slavery, media release, 5 June 2017; C
O’Neil (Shadow Minister for Justice), Keenan
proposes modern slavery act with no penalties, media release,
16 August 2017.
[28]. Greens,
Additional
comments, op. cit.
[29]. Regulatory
Impact Statement, op. cit., p. 50; JSC on FADT, Modern
slavery and global supply chains: interim report of the Joint Standing
Committee on Foreign Affairs, Defence and Trade’s inquiry into establishing a
Modern Slavery Act in Australia, Commonwealth of Australia, August
2017, Canberra, pp. 19–25.
[30]. Regulatory
Impact Statement, op. cit., pp. 50–1; JSC on FADT, Hidden
in plain sight, op. cit., pp. 101–3 and pp. 133–135. Further
detail is provided in the ‘Key issues and provisions’ section of this Digest.
[31]. See
for example: Law Council of Australia (LCA), Australian-first
Modern Slavery Bill celebrated, media release, 28 June 2018,
Oxfam Australia, Modern
Slavery Bill lacking: Oxfam, media release, 28 June 2018;
Human Rights Law Centre (HRLC), New
Modern Slavery Bill lacks teeth, media release, 28 June 2018;
Australian Council of Trade Unions (ACTU), Modern
Slavery Act falls way short in current form, media release,
28 June 2018. Around half of submitters to the inquiry into the Bill
raised this concern.
[32]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 87–91 (Recommendations 6 and
7).
[33]. See:
Modern
Slavery Act 2015 (UK), Part 4; Independent Anti-Slavery
Commissioner website.
[34]. Parliamentary
Joint Committee on Law Enforcement, An
inquiry into human trafficking, slavery and slavery-like practices,
Commonwealth of Australia, Canberra, July 2017, pp. 39–42
(Recommendation 9).
[35]. Explanatory
Memorandum, Modern Slavery Bill 2018, p. 3.
[36]. Hawke,
Government
strengthens Australia's response to modern slavery, op. cit. See
also Australian Government, Budget measures:
budget paper no. 2: 2018–19, p. 127.
[37]. Justice
and International Mission of the Uniting Church Synod of Victoria and Tasmania,
Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 59], 20 July 2018, p. 5. See also: Property Council of Australia, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 36], 20 July 2018; Nestle Australia, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 76], n.d.; Global Compact Network Australia, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 89], 25 July 2018, p. 2; Supply Chain Sustainability School,
Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 52], 20 July 2018, p. 5; Outland Denim, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 92], n.d.
[38]. Advisory
Committee of the Modern Slavery Registry (comprising the Business & Human
Rights Resource Centre, Humanity United, Freedom Fund, Anti-Slavery
International, Ethical Trading Initiative, Unicef UK, Focus on Labour
Exploitation (FLEX), Freedom United, and CORE Coalition), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 56], n.d., pp. 6–7.
[39]. Regulatory
Impact Statement, op. cit., pp. 44–7, 59–60.
[40]. Housing
Industry Association, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 38], 20 July 2018, pp. 4–10.
[41]. The
Statement of Compatibility with Human Rights can be found at page 26 of the Explanatory
Memorandum to the Bill.
[42]. The
Committee deferred its consideration of the Bill: Parliamentary Joint Committee
on Human Rights, Human
rights scrutiny report, 7, 14 August 2018, p. 139.
[43]. Protocol
to Prevent, Suppress and Punish Trafficking in Persons, especially Women and
Children, supplementing the United Nations Convention against Transnational
Organized Crime, op. cit., Article 3(a). Articles 3(a) and
(b) further provide that exploitation ‘shall include, at a minimum, the
exploitation of the prostitution of others or other forms of sexual
exploitation, forced labour or services, slavery or practices similar to
slavery, servitude or the removal of organs’ and that the consent of a victim
to the intended exploitation is irrelevant where any of the means set out in
Article 3(a) have been used.
[44]. ILO
Convention (No. 182) concerning the Prohibition and Immediate Action for
the Elimination of the Worst Forms of Child Labour,
op. cit., Article 3.
[45]. AGD,
Modern
slavery in supply chains reporting requirement: public consultation paper and
regulatory impact statement, op. cit., p. 14.
[46]. Federation
of Ethnic Communities Councils of Australia (FECCA), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 18], 20 July 2018, pp. 2–3. See also:
Women’s Research, Advocacy and Policy (WRAP) Centre and Good Shepherd Australia
New Zealand, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 22], 19 July 2018, pp. 9–20; The Border Crossing
Observatory and the Monash Migration and Inclusion Centre, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 93], 20 July 2018, pp. 3–4.
[47]. WRAP
Centre and Good Shepherd Australia New Zealand, Submission
to L&C Committee, op. cit., pp. 12–13; The Salvation Army, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 33], 20 July 2018, p. 6; Australian Chamber of Commerce
and Industry (ACCI), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 66], p. 5.
[48]. Australian
entity, consolidated revenue and reporting period
are defined in clause 4.
[49]. Entity
and carries on business in Australia are defined in clauses 4
and 5 respectively.
[50]. Clause 5.
[51]. JSC
on FADT, Hidden
in plain sight, op. cit., p. 97 (Recommendation 8).
[52]. Income Tax
Assessment Act 1997, section 960-100.
[53]. Clauses 5
and 15. As will be the case for other reporting entities, the Minister
must prepare each statement within six months of the end of the reporting
period.
[54]. Modern Slavery
Act 2015 (UK), subsections 54(1), (2) and (12); Modern
Slavery Act 2018 (NSW), subsections 24(1) and (2) (commercial
organisations); section 25 and amendments to the Public Works
and Procurement Act 1912 (NSW) at item 5.6 of Schedule 5 to the Modern
Slavery Act 2018 (NSW) (government agencies). The Modern Slavery Act
2018 (NSW) also includes amendments to the Public Finance
and Audit Act 1983 (NSW) giving the Auditor-General powers to conduct
modern slavery audits of government agencies (item
5.5 of Schedule 5 to the Modern Slavery Act 2018 (NSW)).
[55]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 104–7 (Recommendation 12); See
for example: Business Council of Australia (BCA), Business
Council welcomes an Australian Modern Slavery Act, media release,
10 May 2018; Woolworths, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 47], 20 July 2018; Oxfam Australia, Modern
Slavery Bill lacking: Oxfam, op. cit.; International Justice
Mission (IJM) Australia, International
Justice Mission welcomes Modern Slavery Bill tabled by Federal Parliament,
media release, 28 June 2018.
[56]. Clauses 4
and 5.
[57]. A
Hawke, ‘Second
reading speech: Modern Slavery Bill 2018’, House of Representatives, Debates,
(proof), 28 June 2018, pp. 15–8. See also Explanatory
Memorandum, Modern Slavery Bill 2018, pp. 11, 37.
[58]. Hawke,
‘Second
reading speech: Modern Slavery Bill 2018’ op. cit.; Regulatory
Impact Statement, op. cit., pp. 59–60
[59]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 101–4 (Recommendation 11);
The
Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015 (UK),
Regulation 2. Greens senators called for consideration of a lower
threshold for mandatory reporting, such as entities with annual revenue of
$25 million or more: Greens, Additional
comments, op. cit.
[60]. Modern
Slavery Act 2018 (NSW), section 24; the amount may be amended by
regulation.
[61]. G Berejiklian,
‘Second
reading speech: Modern Slavery Bill 2018’, NSW, Legislative Assembly, Debates,
(proof), 6 June 2018, pp. 77–9.
[62]. Regulatory
Impact Statement, op. cit., p. 50; JSC on FADT, Hidden
in plain sight, op. cit., pp. 101–3.
[63]. ACCI,
Submission
to AGD, Modern slavery in supply chains reporting requirement: public response to
consultation paper and regulatory impact statement,
October 2017, pp. 11–12.
[64]. ACCI,
Submission
to L&C Committee, op. cit., p. 3.
[65]. BCA,
Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 67], July 2018, p. 4; Australian Industry Group
(AIG), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 62], 20 July 2018, p. 3; Australian
Retailers Association, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 35], July 2018.
[66]. Walk
Free Foundation, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 37], 20 July 2018, p. 3; The Salvation Army, Submission
to L&C Committee, op. cit., pp. 6–7; Justice and International
Mission of the Uniting Church Synod of Victoria and Tasmania, Submission
to L&C Committee, op. cit., pp. 4–7.
[67]. Walk
Free Foundation, Submission
to L&C Committee, op. cit., p. 3.
[68]. Justice
and International Mission of the Uniting Church Synod of Victoria and Tasmania,
Submission
to L&C Committee, op. cit., pp. 6–7.
[69]. Regulatory
Impact Statement, op. cit., p. 50; JSC on FADT, Hidden
in plain sight, op. cit., pp. 101–3.
[70]. Advisory
Committee of the Modern Slavery Registry, Submission
to AGD, Modern slavery in supply chains reporting requirement: public
consultation paper and regulatory impact statement, n.d., p. 2. The
Advisory Committee’s submission
to the L&C inquiry does not comment on the proposed threshold, but referred
the Committee to its earlier submissions and stated that its comments were
supplemental to them.
[71]. Australian
Human Rights Commission (AHRC), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 70], 20 July 2018, p. 6; LCA, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 64], 24 July 2018, pp. 6–7; F McGaughey et. al., Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 30], 18 July 2018, p. 8.
[72]. Anti-Slavery
Australia, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 50], 20 July 2018, p. 5; Project Respect, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 10], n.d.; Human Rights Watch, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 71], 20 July 2018.
[73]. STOP
THE TRAFFIK Australia (a coalition of 30 organisations), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 48], n.d., pp. 7–8; P Loone (Chief Technology
Officer, STOP THE TRAFFIK Australia), Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 49], 19 July 2018, pp. 2–4; Catholic
Archdiocese of Sydney, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018, [Submission
no. 85], July 2018, pp. 7–8.
[74]. DoHA,
Submission
to L&C Committee, op. cit., p. 5.
[75]. Ibid.
[76]. AGD,
Modern
slavery in supply chains reporting requirement, op. cit.,
p. 15.
[77]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 101–4 (Recommendation 11).
[78]. Subclause 6(1).
[79]. Subclause 6(3).
[80]. Explanatory
Memorandum, p. 13.
[81]. Clauses
13 and 14.
[82]. Subclause 16(1).
[83]. Subclause 16(1)(f)(ii).
[84]. Subclause 16(2).
[85]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 107–17 (Recommendation 14).
[86]. Modern Slavery
Act 2015 (UK), subsection 54(5); Modern
Slavery Act 2018 (NSW), subsections 24(2)–(5).
[87]. AGD,
Modern
slavery in supply chains reporting requirement, op. cit.,
p. 16.
[88]. Explanatory
Memorandum, p. 19.
[89]. Ibid.,
pp. 19–20.
[90]. Clauses 13–15.
This is similar to the timeframe of five months recommended by the JSC on FADT:
Hidden
in plain sight, op. cit., pp. 99–100 (Recommendation 9).
[91]. Clause 4.
[92]. Explanatory
Memorandum, p. 10.
[93]. Subclause 13(2).
Principal governing body is defined in clause 4 as
‘the body, or group of members of the entity, with primary responsibility for
the governance of the entity’ or ‘if the entity is of a kind prescribed by
rules ... a prescribed body within the entity, or a prescribed member or members
of the entity’. Responsible member is also defined in clause 4.
[94]. Subclause 14(2).
Control of an entity by another entity is defined in clause 4
to mean control of the entity within the meaning of the accounting
standards (which will have the same meaning as in the Corporations Act
2001).
[95]. Ibid.
[96]. JSC
on FADT, Hidden
in plain sight, op. cit., p. 101 (Recommendation 10); Modern Slavery
Act 2015 (UK), subsection 54(6).
[97]. Clauses 19
and 20 provide for registration of statements and revised statements
respectively.
[98]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 123–7 (Recommendations 16
and 17).
[99]. Ibid.,
p. 124. While the UK does not have a government-supported central
repository, subsections 54(7) and (8) of the Modern Slavery
Act 2015 (UK) require organisations to make their statements publicly
available, and repositories have been established by the Business
& Human Rights Resource Centre and TISC
Report.
[100]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 127–9 (Recommendation 18).
[101]. Ibid.
[102]. These
points have been made in submissions to the inquiry into the Bill. See for
example: Advisory Committee of the Modern Slavery Registry, Submission
to L&C Committee, op. cit., pp. 1–3; Justice and International Mission
of the Uniting Church Synod of Victoria and Tasmania, Submission
to L&C Committee, op. cit., pp. 8–9; AHRC, Submission
to L&C Committee, op. cit., pp. 7–8.
[103]. Regulatory
Impact Statement, op. cit., p. 57.
[104]. DoHA,
Submission
to L&C Committee, op. cit., p. 6.
[105]. Clauses 13–16.
[106]. In
June 2018, the UK’s Independent Anti-Slavery Commissioner called on the UK
Government to exclude organisations that failed to report from government
contracts, citing a report that found that of the top 100 contractors to
government, 40 per cent failed to meet the basic legal requirements
of the UK scheme: Independent Anti-Slavery Commissioner, ‘Government
must use the power of public procurement to tackle slavery’, News and
Insights, 18 June 2018.
[107]. O’Neil,
Labor
demands strong slavery laws, op. cit; ACTU, Modern
Slavery Act falls way short in current form, op. cit.; LCA, Australian-first
Modern Slavery Bill celebrated, op. cit.; IJM Australia, International
Justice Mission welcomes Modern Slavery Bill tabled by Federal Parliament,
op. cit.; Oxfam Australia, Modern
Slavery Bill lacking: Oxfam, op. cit.; HRLC, New
Modern Slavery Bill lacks teeth, op. cit. This aspect of the Bill
was also highlighted as a weakness in many submissions to the inquiry into the
Bill.
[108]. Modern
Slavery Act 2018 (NSW), subsections 24(2), (6) and (7); Crimes
(Sentencing Procedure) Act 1999 (NSW), section 17.
[109]. Modern Slavery
Act 2015 (UK), subsection 54(11).
[110]. JSC
on FADT, Hidden
in plain sight, op. cit., pp. 131–6 (Recommendation 19).
[111]. Regulatory
Impact Statement, op. cit., p. 57.
[112]. P
Carter, ‘Modern
Slavery Bill: will a race to the top beat a big stick?’, Probono News,
Probono Australia, 4 July 2018.
[113]. DoHA,
Submission
to JSC on FADT, op. cit., p. 7.
[114]. Regulatory
Impact Statement, op. cit., p. 51; JSC on FADT, Hidden
in plain sight, op. cit., pp. 131–4. This is also reflected
in submissions to the inquiry into the Bill.
[115]. BCA,
Submission
to JSC on FADT, Inquiry into establishing a Modern Slavery Act in Australia,
[Submission no. 121], May 2017, p. 10.
[116]. AIG,
Submission
to AGD, Modern slavery in supply
chains reporting requirement: public consultation paper and regulatory impact
statement, November 2017, p. 10.
[117]. Regulatory
Impact Statement, op. cit., p. 51.
[118]. LCA,
Submission
to AGD, op. cit., pp. 6, 25–6.
[119]. HRLC,
Submission
to AGD, Modern slavery in supply chains reporting requirement: public
consultation paper and regulatory impact statement, 23 October 2017,
p. 6. A similar argument was raised by Anti-Slavery Australia in relation
to the Californian Transparency in Supply Chains Act 2010: Anti-Slavery
Australia, Submission
to JSC on FADT, Inquiry into establishing a Modern Slavery Act in Australia,
[Submission no. 156] n.d., p. 75.
[120]. Independent
Anti-Slavery Commissioner, ‘Taking
action on slavery in the private sector’, News and Insights,
5 April 2018. See also Independent Anti-Slavery Commissioner, ‘Joint
statement calls on government for central modern slavery registry’, News
and Insights, 3 July 2018.
[121]. Although
not decisive of an intention to cover the field on this subject matter, the
Bill does not include a provision that explicitly deals with concurrent
operation of state and territory laws. See, for example, section 16 of the Security of
Critical Infrastructure Act 2018, which provides: ‘This Act is not
intended to exclude or limit the operation of a law of a State or Territory to
the extent that that law is capable of operating concurrently with this Act’.
See also section 23 of the National Consumer
Credit Protection Act 2009.
[122]. This
would be the case even if there are no conflicting rights or duties under the
two laws. See: Clyde
Engineering Co Ltd v Cowburn [1926] HCA 6; (1926) 37 CLR
466, Isaacs J at 489; Ex Parte McLean [1930] HCA 12; (1930)
43 CLR 472, Dixon J at 482.
[123]. Rules
will be able to be made by the Minister by legislative instrument (clause 25).
[124]. The
Border Crossing Observatory and the Monash Migration and Inclusion Centre, Submission
to L&C Committee, op. cit., p. 4. For examples of such
provisions, see Independent
Parliamentary Expenses Authority Act 2017, section 62; Defence Act 1903,
section 51XA.
[125]. The
Salvation Army, Submission
to L&C Committee, op. cit., p. 8;
AHRC, Submission
to L&C Committee, op. cit., p. 9; Global Compact Network
Australia, Submission
to L&C Committee, op. cit., p. 2; Executive Council of Australian
Jewry, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 17], 18 July 2018, p. 7; Supply Chain
Sustainability School, Submission
to L&C Committee, op. cit., p. 3.
[126]. The
Salvation Army, Submission
to L&C Committee, op. cit., p. 8; Executive Council of Australian
Jewry, Submission
to L&C Committee, op. cit., p. 7; Australian Lawyers for Human
Rights, Submission
to L&C Committee, Inquiry into the Modern Slavery Bill 2018,
[Submission no. 39], 20 July 2018, p. 8.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
Creative Commons
With the exception of the Commonwealth
Coat of Arms, and to the extent that copyright subsists in a third party,
this publication, its logo and front page design are licensed under a Creative Commons
Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and
communicate this work in its current form for all non-commercial purposes, as
long as you attribute the work to the author and abide by the other licence
terms. The work cannot be adapted or modified in any way. Content from this
publication should be attributed in the following way: Author(s), Title of
publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists
in third party quotes it remains with the original owner and permission may
be required to reuse the material.
Inquiries regarding the licence and
any use of the publication are welcome to webmanager@aph.gov.au.
Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament.
They are produced under time and resource constraints and aim to be available
in time for debate in the Chambers. The views expressed in Bills Digests do
not reflect an official position of the Australian Parliamentary Library, nor
do they constitute professional legal opinion. Bills Digests reflect the
relevant legislation as introduced and do not canvass subsequent amendments
or developments. Other sources should be consulted to determine the official
status of the Bill.
Any concerns or complaints should be
directed to the Parliamentary Librarian. Parliamentary Library staff are
available to discuss the contents of publications with Senators and Members
and their staff. To access this service, clients may contact the author or
the Library’s Central Enquiry Point for referral.