Potential amendments raised in evidence
intent and provisions of the bill were overwhelmingly supported in evidence,
there were some aspects of the bill, or matters not covered by the bill, that
witnesses and submitters considered warranted further consideration. Matters
raised in this regard included:
- the lack of any provision for an independent statutory
- the absence of penalties in relation to the modern slavery
- whether the threshold of $100 million consolidated revenue, above
which an entity is subject to the reporting requirement, is appropriate;
- matters related to the administration of the central register for
Modern Slavery Statements, and more broadly the accessibility of statements;
- whether a list of entities subject to the reporting requirement
should be maintained, and for what purpose;
- the possibility of a compensation scheme for victims of
trafficking and slavery;
- the potential for harmonisation between jurisdictions of legislation
directed at addressing modern slavery; and
- the terms of the review of the Act to be undertaken in three
These matters, including calls for amendments and support for the bill
as it stands, are considered in this chapter. This chapter also sets out the
committee's views on the bill and matters raised during the inquiry, and concludes
with the committee's recommendations.
statutory anti-slavery officer
number of submitters and witnesses argued that the bill should provide for the
creation of an independent statutory officer for anti-slavery, as included in
the UK Act. Much of this evidence noted that one of the core recommendations of the Joint
Committee's report was that 'the
Australian Government establish an Independent Anti-Slavery Commissioner under
the proposed Modern Slavery Act', with the authority and resources to fulfil a
range of functions:
the implementation of the National Action Plan to Combat Human Trafficking
and Slavery 2015–19 and any future plans to combat
and investigating compliance of government agencies with the National Action
Plan to Combat Human Trafficking and Slavery 2015–19 and existing modern
victims of modern slavery, including children, have access to appropriate
education, guidance and awareness training for government agencies and entities
about modern slavery issues;
- engaging with
government and entities on the implementation and operation of the proposed
supply chain reporting requirement and central repository;
and analysing data on modern slavery in Australia;
legislated reviews of the proposed Modern Slavery Act at least every three
- improving coordination
between criminal justice agencies in identifying and prosecuting modern slavery
advice on how to improve the proposed Modern Slavery Act, as well as responses
to modern slavery, on an ongoing basis;
independent oversight of the response to combatting modern slavery across all
sectors, and identifying gaps and solutions;
- working with
various agencies, law enforcement bodies, prosecutors and others to increase
the identification and reporting of modern slavery crimes, and to bolster the
prosecution rates for modern slavery offences;
community awareness of modern slavery; and
- any other
submissions argued that the lack of a statutory office was a major deficiency
of the bill. For instance, Walk Free stated:
failure to include a measure such as a Statutory Office similar to the UK
Independent Anti- Slavery Commissioner is regarded by most involved in these
issues as a major failing of the Bill and the matter that must be addressed by
amendment of an otherwise excellent Bill.
Respect submitted the bill was 'significantly weakened' by the lack of
provision for an independent anti-slavery officer with a mandate to:
- engage with
government, civil society, unions and business in relation to matters to do
with modern slavery;
- oversee the
implementation as well as monitoring of national plans relating to modern
legislative reviews of any implemented Act;
- ensure survivors
have access to appropriate support; and,
- work with other
agencies to strengthen identification, response, reporting and data collection.
suggested that a statutory officer would be able to capitalise on the current
momentum towards tackling slavery, not only in government, but more broadly across
society. Ms Fiona McLeod SC told the committee:
want to make this point as well: the passage of this bill actually represents
an enormous and exciting opportunity to spearhead a major campaign around what
is required by business. If you have a commissioner in place at the outset, you
can build on that momentum from the outset.
A number of
submissions emphasised the value of an independent office that could provide
advice and oversee the Act more effectively than the proposed Business Engagement
Unit. Walk Free provided an outline of these functions, and explained:
a role for an Australian Statutory Office to be a trusted friend to business as
they seek to improve their systems and understanding of the challenges of
rooting out slavery in complex international supply chains. Business would
benefit from a trusted point of contact from whom to seek advice if they
experience issues in their supply chains. It is unrealistic to expect business
to seek that confidential advice from a government department responsible for
the administration, compliance and enforcement (potentially penalties) around
their reporting. Such a role and relationship would only be possible if the
Office was totally separate to, and independent of, the government agency
responsible for the repository and compliance with the legislation.
At a public
hearing, Mr Chris Evans, Government and Business Strategy, Walk Free,
elaborated on how a modestly-resourced independent officer could complement the
work of the department through the Business Engagement Unit:
question for me is around the compliance function, which should stay in Home
Affairs. There's a champion community awareness function, and, quite frankly, I
would argue Home Affairs are not the best body to do that. They're currently
being funded to do both. What we argue is that the statutory office can be a
small office that can provide that sort of function...We don't think it needs to
be a hugely resourced body...We see it as an advocate adviser role and, as I say,
if you take the budget currently allocated and divvy it up between the two
functions, I don't think you're too far off.
TRAFFIK argued that a commissioner would be better placed than the Business
Engagement Unit to take on monitoring and review of the Act, as well as
in other areas of Australian government have roles which include advocacy,
examination and review of legislation and oversight of policies and practices
which support the implementation of legislation. The Australian Public Service
Values and Code of Conduct, which would govern the unit in the Department of
Home Affairs, requires a public service which is impartial and apolitical and
states that it is the role of those working therein to explain policy, rather
than to advocate for or critique it. It
is problematic for the key body in charge of administering the Act to be so
intrinsically tied to the government because evidently, this leaves no scope
for criticism and advocacy.
the issue of modern slavery is not addressed by one Government department
alone....There are at least six government departments whose engagement and
action will be required to implement the Act effectively.
The ALA also
noted that an independent statutory officer could be responsible for reviewing
the Act in the future, to ensure it is effective, and for monitoring levels of
stakeholder and public awareness and the operation of its reporting
highlighted the positive effect that the UK Anti-Slavery Commissioner had on
the implementation and oversight of a similar Anti-Slavery legislative
framework. The British
Institute of International and Comparative Law submitted that the UK Commissioner
has 'performed an
invaluable role in raising community awareness of the issue of modern slavery
in the UK and mobilising action', including work to 'liaise with a variety of
stakeholders such as NGOs, trade unions, business and government with the
purpose of encouraging cooperation and inciting action around the eradication
Army also noted that:
widely acknowledged that one of the most successful aspects of the UK Modern
Slavery Act has been the impact of the work led by the UK Independent
Anti-Slavery Commissioner. Indeed, an independent review of the UK Act found
that, in its first year, more victims were identified, more proactive and
reactive police investigations were undertaken, more prosecutions and convictions
were achieved, judicial awareness was increasing and leading to stronger
sentencing and more training and cross-agency coordination and reporting was
put into place.
submissions noted that a statutory officer could also oversee the regulatory functions
associated with compliance, including any penalty or compensation frameworks, should
the bill or Act be amended to include them.
participants calling for the appointment of an independent modern slavery
statutory officer framed the role as that of a 'commissioner'. Mr Chris Evans,
Walk Free, suggested that some of the opposition to the appointment of a
statutory officer (discussed below) might be mitigated if a more appropriate
title was found:
argue that it would be helpful...that we think of another title [other than
commissioner]. I'm making the argument that it's about a statutory office; it's
not a commissioner in the Australian context, which we associate with
mediation, arbitration and decision-making [for example, relating to Fair Work
or Human Rights commissioners]. That's not what the UK independent commissioner
does. I haven't found a really good name, but I think of it as an advocacy or
advisory role, which is what it is.
to a statutory officer
participants supported the bill's omission of an independent Anti-Slavery
Commissioner. For example, the ARA suggested it would be 'premature' for the
bill to contain provision for a statutory office, and that it should be
considered at the three-year review.
noted that the UK Commissioner had roles that were not directly
transferable to the Australian context, including that the Australian bill was
developed with a focus on supply chains. In contrast, the UK model was developed
in a context where trafficking, labour market supervision and porous borders
are of greater immediate concern, and in this context a different approach,
including provision for a statutory officer, is appropriate.
department stated that the Business Engagement Unit would be better positioned
than a commissioner to fully implement the Act:
support and advice to business, managing the Modern Slavery Register and
undertaking awareness-raising and training are best undertaken by the dedicated
Modern Slavery Business Engagement Unit rather than an Independent Anti-Slavery
Commissioner. These functions require significant resources and time and it is
unlikely any Commissioner could undertake this work while also carrying out a
range of other statutory functions. Consultations also indicated that requiring
entities to contact Government rather than an independent body for advice is
unlikely to impact whether entities seek assistance. This approach is also
consistent with the role of the UK Independent Anti-Slavery Commissioner, which
does not include a formal, statutory responsibility to work with business.
Australia already has a well-coordinated national response to modern slavery
which is subject to robust oversight from Parliament, Government Ministers and
The department also stated that the need for a commissioner could be
revisited as part of the three-year review.
lack of penalties for non-compliance
received contrasting evidence about the lack of penalties in the bill, both for
liable entities not reporting, as well as for non-compliant or substandard
reporting. Whereas some witnesses and submitters thought that this was a
positive element of the bill, as it would allow a 'race to the top' for private
enterprise to comply, others suggested that this would make the compulsory
reporting requirement under the act unenforceable.
for the bill's lack of penalties
The AICD set
out a number of reasons for their support for the bill's approach of not including
a penalty regime for non-compliance with the reporting requirement:
be consistent with legislation in the United Kingdom, France and California,
all jurisdictions that have been leading efforts to address modern slavery
create an organisation-driven response, rather than a compliance-driven
response which will more likely lead to lasting and impactful changes in
supports transparency in reporting and the sharing of effective initiatives to
combat modern slavery risks.
creates a culture of 'encouragement' which will look to positively change
foster a 'race to the top' culture as highlighted by The Hon Alex Hawke MP
Assistant Minister for Home Affairs in his media release dated 28 June 2018.
Muskovic, the National Policy Manager, Sustainability and Regulatory Affairs
for the Property Council of Australia, told the committee that the inclusion of
penalties could, in fact, encourage a meaningless 'tick box' approach to reporting:
We want a
culture that encourages people to find and remediate instances of modern
slavery rather than something that creates a disincentive up-front for
companies not to look. As you've correctly said, you can submit a statement
under the UK act that says: 'We looked. We didn't find anything. Tick.' That's
a compliance statement. We're not wanting to encourage that sort of approach
from the outset, so we've said that we don't think the immediate introduction
of penalties is going to motivate corporate engagement.
suggested that the establishment of a central repository for compliance
statements would drive higher rates of compliance for Australian stakeholder,
noting that the UK model did not incorporate this measure:
the focus to be on best practice rather than on penalty and punishment, which
is not conducive to cultural change and committed buy in. During the
development of the legislation there has also been meaningful engagement
between business and civil society, improved understanding and relationships,
and it is that environment that will facilitate real impact....
establishment of the central repository will greatly enhance transparency in
comparison to what has been possible under the UK Act. The inability to
introduce a definitive list of businesses required to report under the
Australian legislation will make the practicality of applying penalties highly
problematic at this stage.
Moore, National Policy and Advocacy Coordinator, Freedom Partnership to End
Modern Slavery, Salvation Army, also noted that it would be impractical for the
government to set up a penalty regime without a clear list of entities that
understand that the government's done some extensive work trying to develop a
confirmed list of who has to report. My understanding is that that is not
possible at this point and that a great deal further work is going to be
required to confirm who is actually captured under the legislation. So, in our
view, if you don't know who has to report, you can't actually enforce your
Ms Moore also
commented that the reputational risk to businesses would be more effective than
any potential financial penalty:
extensive conversations with a range of business representatives, and my
understanding is that a financial penalty in and of itself is not actually
going to be the deterrent that many think it will be. The real deterrent is the
Uniting Church of Australia, noted that some regulators were reluctant to 'enforce
civil penalties', even when they were able to, 'simply because of the resources
that it consumes to have to go to court to actually get that civil penalty
remedy enforced on the entity'.
On the other
hand, some witnesses and submitters argued that clear penalties should be
incorporated into the Act. For
example, Anti-Slavery Australia suggested that penalties should be considered
for a number of breaches, including for:
that fail to prepare a modern slavery statement, prepare an incomplete
statement or make a deceptive, misleading or fraudulent statement be subject to
sanctions or penalties. Guidance could be taken from the provisions of the
Australian Consumer Law concerning misleading and deceptive conduct (section
18), the exculpatory provisions of the Illegal Logging Prohibition
Act 2012 (Cth) and the civil penalty provisions of the Corporations Act
Adams, Director of Legal Advocacy, Human Rights Law Centre, summarised a number
of concerns about a non-enforceable reporting scheme, especially the lack of
incentive for compliance for companies without a public-facing aspect:
think that the legislation does need penalties for companies that fail to
report or provide false or misleading information. We have no problem with the
idea of trying to encourage a positive start to this and provide as much
assistance as possible to business to ensure that they comply. But the idea
that reputational risk alone will drive compliance and lead to a race to the
top is just not borne out by the evidence elsewhere.
believe that just including the central register provides a complete answer to
that problem. Some Australian organisations will undoubtedly be motivated by a
genuine desire to do the right thing, by the fact that it's the law of the land, by investor pressure or by
reputational damage to report voluntarily. [But] there will be a proportion of businesses
that aren't motivated by those factors, particularly those without a public
facing aspect to their business or who have little interest in corporate social
responsibility. Those businesses will need additional motivators.
Redmond suggested that the three years of experience from the UK indicated the
drawbacks of voluntary systems regarding low rates of compliance and the slow
adoption of good reporting practices:
Office in the UK estimates that there are between 9,000 and 11,000 companies
now required to report under the UK act. Only a short time ago, the estimate
was 17,000, so it's floating around; there's some uncertainty. The Modern
Slavery Registry, which is the authoritative collection of modern slavery
statements collected, as of this morning reports that there are 6,394
statements by 5,596 companies. It doesn't indicate whether any of those are
voluntary statements. So we are looking at roughly 50 per cent compliance
simply in putting in a modern slavery report, three years after the
introduction of that legislation. Look at the quality of the reports. The
Modern Slavery Registry reports that only 19 per cent of the reports
lodged meet the minimum requirement of the act—that is, they were approved by
the by the board, signed by a director and published on a website. It is 19 per
cent, and this is three years on.
Ms McLeod SC
suggested to the committee that penalties were not only about punishing
breaches, but also sending a signal about how seriously the Commonwealth considered
is a penalty in place, a number of companies have indicated that that would
help them understand what the obligations are. Where a voluntary mechanism
creates a level of uncertainty, [when] that's what's actually required... An open-ended
requirement without consequence, apart from the amorphous reputational risk
consequence that depends on consumers knowing that they have or haven't
complied, is too unclear for general counsel...to understand how they're meant to
advise on that.
A wide range
of penalty options were canvassed in evidence including:
with the high penalties under NSW legislation of 1,000 penalty units (or up to
$1.1 million) as a criminal offence, which would also avoid duplication across
Commonwealth and state anti-slavery schemes;
- smaller fines
given under civil penalty provisions, which would also potentially serve as a
penalty on the reputation and integrity of the entity;
penalties applicable both to the corporate entities and to senior executives,
with the possibility of escalating fines for repeat offenders;
non-compliant companies from tendering for Commonwealth contracts, grants, and
trade or consular assistance overseas; and
- for entities
that consistently breach reporting requirements to be named in the Parliament
or included on a public list of non-compliant bodies.
organisations that supported penalties advised that a penalty regime could be
phased in gradually to give liable entities time to adjust their reporting
frameworks, seek advice, and ensure the integrity of supply chains. For example,
Anti-Slavery Australia and the Human Rights Law Centre both supported penalty
provisions coming into effect 12 months following the commencement of the
reporting requirement, which follows the recommendation of the Joint Committee
A number of
other submitters suggested that the need for penalties should be revisited as
part of the three-year review, should poor reporting standards warrant more
coercive measures. This perspective was shared by both organisations that
supported and did not support the introduction of a penalty regime.
while supporting the bill's current provisions, Mr Evans, Walk Free,
the general view is you look at compliance after some experience. I say to
companies: if there's high non-compliance, what will a parliament do? They'll
go for penalties and enforcement of the review. It'll be the obvious response.
If there's very high compliance and companies do the right thing, then there'll
be a different view.
On the other
hand, Advisory Committee to the Modern Slavery Registry, who were 'disappointed'
no financial penalties are included in the bill, submitted:
low reporting levels or poor reporting standards warrant it, penalties be
phased-in after an initial three-year grace period post enactment following the
first legislative review.
compliance and reporting entities
The bill provides
that entities carrying on business in Australia with an annual turnover of more
than $100 million globally must lodge statements of compliance. The committee
received a large amount of evidence on this threshold: whereas some inquiry
participants supported the intent and design of a $100 million threshold,
others suggested it should be amended.
For example, Project
Respect suggested the $100 million threshold would capture 'too few
organisations to address the systemic issue of slavery in global supply chains'.
It argued in support of reducing the threshold in the bill to $25 million
consolidated revenue, which it noted would align with the threshold
requirements for a large propriety company as set out in section 45A of the Corporations
A number of other
witnesses and submitters suggested adopting a $50 million threshold for
compliance, as recommended by the Joint Committee, noting that this would also
align with the NSW framework and the UK threshold (£36 million–around
The AICD suggested
that the implementation of the threshold could be staggered and start at a
higher level, with large entities with revenue of at least $250 million
required to report in the first reporting period, and smaller companies
adopting the lower requirements of the bill in following cycles. This, it was
argued, would assist building positive compliance practices with reporting
entities, as well as providing the Commonwealth time to refine its guidance
Mr Morry Bailes,
President of the Law Council of Australia, gave an estimate of how many
entities would be captured under some of these proposals:
threshold were $100 million [it] is 3,957, whereas at $60 million it's 6,421.
Out of interest, if it were $25 million, that would rise to over 16,000.
The committee heard that the number of businesses that would look to
address modern slavery would be far greater than these estimates, as large
companies would drive compliance in smaller businesses that fed into their
supply chains. Mr Scott Barklamb, Director, Workplace Relations,
Australian Chamber of Commerce and Industry, described this process to the
impact of the initiative, both positively in addressing modern slavery and as
an impost and a new administrative requirement on business, is going to extend
well beyond the nominal coverage of the direct reporting entities. Utterly
conservatively we say there would be at least 10 more entities for every formal
reporting entity. That gets you to 30,900 on the figures we were given earlier
[by Mr Bailes]. I noted that our [the Law Council] talked about Qantas as
having 10,000 suppliers. Whatever action is taken here goes well beyond the
nominal 3,000, introducing this consideration to a vast swathe of the
Australian business community [under] $100 million, the level set in the bill.
These themes were drawn out in other evidence. For example, Walk
Free–having previously supported a $50 million threshold–submitted that the
$100 million threshold in the bill:
appropriate starting point for the legislation. It will provide the opportunity
to avoid the problems experienced in the UK where the overreach of scope has
undermined impact and compliance.
that the impact of the legislation will be experienced by businesses further
down the supply chain of those formally required to report as those businesses
require greater transparency of their suppliers. Smaller businesses will also
to be encouraged to voluntarily report. Having consulted widely within the
business community and recognising the diverse levels of understanding and
preparedness among business we think the Bill's threshold is appropriate.
Others noted the regulatory burden that would be created if the
threshold were lowered. For example, the ARA supported the $100 million threshold as:
ensure that the retailers with the greatest capacity to influence change are
subject to the reporting requirement, while ensuring that SME retailers, who
may not possess the expertise or capacity to comply with the reporting
requirement, are not unfairly captured by the legislation.
The ACNC noted the NSW Act had a revenue trigger of $50 million, and
suggested this created a higher regulatory burden for charities with employees
in NSW, which affected the not-for-profit sector adversely.
Dr Zirnsak, Uniting Church of Australia, spoke about the practical
implications of lowering the threshold for the Commonwealth:
thing we strongly oppose [in evidence from other stakeholders] is a lowering of
the threshold in the current regime, because we're looking at the system. We're
looking at: how do you effectively engage with 3,000 entities already?
Currently the government has committed five public servants to do that [in the
Business Engagement Unit]. That's 600 entities per staff member already....That's
3,000 reports that have to be gone through before they're put on the register.
There are a whole lot of tasks. We need to think about this as a system, not
just as a piece of legislation. It's very easy to say, 'Let's just expand it to
15,000 or 20,000 entities'–and I'm completely comfortable with that, if the
government then announces we're going to have a new regulatory body with 150
staff. Great! Fantastic! I'll fully support that. But if we're talking five
staff—lowering the threshold at this point in time is not something that will
make this bill more effective; it will make it less effective.
The department also noted the barriers that many small businesses would
have to compliance, which militated against both a lower threshold and the
adoption of a risk-based approach (as discussed below):
The Department's consultations
have clearly demonstrated that smaller entities below the revenue threshold do
not have the capacity or resources to comply with the reporting requirement.
Importantly, many of these entities also do not have sufficient buying power or
market influence to change supplier practices. This includes entities in
sectors that may be seen as higher-risk, such as family-run construction
businesses, farms and small manufacturing companies. Unlike larger businesses,
these entities do not have dedicated procurement teams, access to in-house
legal counsel, or resources to hire staff with sustainability or human rights
expertise. Requiring reporting from these smaller entities would impose
significant regulatory costs and may undermine their competitiveness..
matters relating to threshold and liable entities
The committee also received evidence that argued that the Commonwealth
could adopt a targeted and 'risk-based approach' to reporting, rather than a
revenue threshold. This would provide that entities in high-risk industries
would be required to report regardless of revenue. This could potentially target industries in which there were high risks of slavery
in supply chains, such as electronics, fashion, horticulture, fisheries,
construction and mining.
For example, STOP THE TRAFFIK argued:
financial threshold for reporting is a crude proxy for risk mitigation. It
would be both fairer to the business sector and more effective in terms of the
prevention of modern slavery, for companies who operate in high risk industries
or source from high risk countries to report to the lower threshold of $25
million. The nature of the industry or business sector should also be
considered when developing the reporting framework. For example, adequate due
diligence responses to slavery in a business providing fresh food products
produced in Australia will evidently be different to those required in relation
to a multinational fashion company.
Ms Keren Adams, Director of Legal Advocacy, Human Rights Law Centre,
noted this drop in threshold could be considered as part of the three-year
the things that we would really encourage the government to do is publish a
list of high-risk industries and locations, which is one of the recommendations
of the other inquiry. At the three-year point, we would ideally like to see a
potential drop in the threshold, at least for companies that are operating in
that space, because it's a more targeted response that's more likely to yield
the sort of information that's genuinely useful than a very broadbrush
Mr Peter Loone, Chief Technology Officer, STOP THE TRAFFIK, argued that
the use of technology could reduce the burden of compliance for liable entities
under a risk-based framework. He suggested a well-designed online platform for
statements could mean that large companies with little risk could comply
easily, whereas industries with higher risks would have a more demanding
got a very good system for reporting and you've got statements people have to
make in this report. We think that's not risk assessment; that's doing a
report. In parallel, you could do a low-effort risk assessment capability that
might go down to $25 million turnover or revenue but it may end up being just a
few questions. We may start small; we may start with only two or three
industries. We may start with cotton, cocoa and seafood. It's only when you
filter through that next level that you get the next level of questionnaires
that get a lot of detail, because we know they're the highest risk, and then,
over time, you build up that capability.
The department addressed potential difficulties and drawbacks of adopting
a risk-based approach:
on high-risk sectors would potentially make the regime quite confusing and
complex. Firstly, information about high-risk industries, countries and goods
is very broad. It's incomplete to target the reporting of crime in high-risk
sectors. For example, you might say clothing from a particular country is
potentially tainted by modern slavery, but obviously not every clothing company
or every factory in that country will be subject to the same risk or will be
tainted by the same risk. Equally, there's potential for the dark factories in
what are seen as less high-risk jurisdictions in countries. Secondly, targeting
perceived high-risk areas ignores that all large businesses have modern slavery
risks, irrespective of their sectors. For example, a bank or an accounting firm
might not, at one level, appear to be engaged in any modern slavery risks, but
they may have cleaning contractors, and you also have to think about the
banks–what their lending might enable and that sort of thing. It's our view
that pretty much all businesses that engage the threshold will likely have some
level of modern slavery risk. Thirdly, it would be very difficult to identify
which entities are operating in high-risk sectors and whether they're doing
sufficient business to justify the need for that report. You'd likely need to
establish a secondary threshold so you don't capture businesses that only have
a small area in that sector.
Online central register of Modern Slavery Statements
contains provisions for an online 'Government-administered public register' of
compliance statements, overseen by the Minister. This was highlighted by a range of inquiry participants as a strong feature of
the bill that would make the Australian framework more transparent and robust
than the UK Act. KPMG briefly outlined the benefits:
public register of modern slavery statements is crucial to the comparable and
transparent reporting that will incentivise compliance and accountability. This
dedicated resource will also encourage collaboration and provide a single point
of contact for business to disseminate the relevant reporting information,
reducing the regulatory burden they face.
submissions commended the public aspect of this list, but commented that to be
effective, it must be updated regularly, searchable to facilitate analysis and
comparison, allow tracking of particular entities, contain sufficient data
about compliance and company information, be user-friendly and accessible, and
well-publicised. Others advised that the Minister should be able to provide feedback on
non-compliant or deficient statements, to improve reporting over time.
suggested that the bill should also be amended to require liable entities to
publish their statements on their own websites, as required by the UK Act. Of
this, the Advisory Committee to the Modern Slavery Registry claimed:
would ensure that statements are accessed by a wider audience of interested
parties. This in turn would enhance the ability of the legislation to generate
transparency of information about corporate measures to address modern slavery.
A homepage publication requirement would also ensure that the process of
preparing a company's Modern Slavery Statement attracts greater attention
internally. This should assist in generating higher quality and more detailed
A list of liable entities
A number of
witnesses and submitters argued that the Commonwealth should go beyond the
central repository provided under the bill, and include a provision for the
government to develop public list of liable entities that must comply with the
reporting requirement. For example, the Human Rights Law Centre submitted:
maximize the benefit of the central register and promote greater transparency
and accountability in reporting, we recommend that the Government publish an
annual list of the entities required to report under the legislation, and a
corresponding list of those entities that have failed to report, as proposed by
the Joint Committee.
very least, consideration should be given to requiring the Government, after a
reporting period, to publish a list of names of entities which were supposed to
report in that period but failed to do so.
advocates for this approach suggested that the Commonwealth could determine
liable entities through the annually published Australian Tax Office (ATO)
Corporate Tax Transparency Report (CTTR) of all listed companies with a
turnover of $100 million or more, and privately owned companies with a turnover
of $200 million or more, along with other Commonwealth-held tax data.
McGaughey, Adjunct Professor Holly Cullen, Mr John Southalan, and Dr
Donella Caspersz suggested that once a list of potentially liable companies had
been developed, then:
- the government's
system can then send a notice to the registered office(r) of every such entity,
referring to the requirement for a Modern Slavery Statement;
- the notice
could inform the entity that if a Modern Slavery Statement is not provided (or
a one-page statement as to why that is not required), then the Register will
display the entity's publicly reported consolidated revenue and the fact no
Modern Slavery Statement has been supplied.
department informed the committee that a definitive list of entities required
to report would be difficult to develop and resource-intensive to maintain. It
also indicated that the CTTR would not capture all relevant reporting entities,
as often companies were structured as parts of corporate groups, rather than
standalone entities. The department further noted that the CTTR does not
account for some companies, where revenue is foreign or where groups of
companies are not consolidated for tax purposes.
department suggested that the risks of maintaining such a register were high,
given the fluctuations in revenues for companies and company structures, and
the potential for an incorrectly identified company to suffer financial or
department informed the committee about a number of approaches that the
Minister and/or the Business Engagement Unit could adopt regarding this matter:
business engagement unit would be able to draw on existing datasets and work
closely with other regulators to identify the companies that it believes need
to report. If it becomes aware of an entity that hasn't reported that it
believes should have reported then obviously the business engagement unit would
be making contact with that entity and saying: 'We believe you should have
reported. Is there a reason why you haven't?' They might not have realised they
were required to. There might be a discussion around their threshold....
have to have a public list, and certainly I don't think you would need to have
anything in the legislation. There's nothing stopping the business
engagement...if it is feasible, from having either a private list or something
that is more public facing. It's just not something that at this point is
practically feasible. It's certainly something that the unit will continue to
Compensation scheme for victims of
trafficking and slavery
A number of
stakeholders called for the Commonwealth to adopt a compensation scheme for
victims of trafficking and slavery, as recommended by the Joint Committee. It was noted that state and territory-based victims of crime schemes were
inconsistent, difficult to navigate, and complex when dealing with slavery
cases that occurred in more than one territory. Ms McLeod SC, an expert in this area, summed up why this was necessary:
National Compensation Scheme for offences under Division 270 and 271 of the
Commonwealth Criminal Code is necessary to ensure that Australia effectively
fulfils its obligations under international law by providing a unified
framework that avoids the inconsistencies and unfairness associated with the
current varied State and Territory specific crime compensation schemes.
Ms McLeod SC
noted that the Commonwealth already administers victim compensation schemes, including
for defence abuse reparation and for Australian victims of overseas terrorist
acts, which provided good models for consideration. A range of funding mechanisms were suggested in evidence, including reclaiming costs
from perpetrators or from proceeds of crime more generally.
department submitted that further recommendations from the Joint Committee
report are currently being considered by government, including a compensation scheme.
Harmonisation between jurisdictions
A number of witnesses and submitters were concerned about the potential
confusion stemming from duplicative anti-slavery regimes of the Commonwealth
and NSW governments. Given this challenge, the Commonwealth was encouraged to look to engage the
states and territories in a positive dialogue about how differing systems could
be harmonised. For example, the Law Council submitted that it:
...encourages the Commonwealth to work with New South Wales to
harmonise reporting criteria, to avoid entities captured by both regimes having
to produce two statements, and to reduce the compliance costs and confusion
that occurs from entities being subject to two reporting regimes.
Mr Barklamb, ACCI, observed that there was
scope for the Commonwealth to encourage jurisdictions to submit reports under the Act
for their government entities, which would also drive harmonisation across
levels of government:
suggest the committee might urge the states to themselves submit their
government business entities to this process...and to provide similar guidance
and tendering requirements. There is a real opportunity for some cooperative
federalism with the states here.
Definition of modern slavery
Slavery Links submitted that:
[T]he definition of slavery used in the Modern Slavery Bill
should be consistent with the definition of slavery used in the Criminal Code.
Businesses, anti-slavery organisations and slaves themselves need a coherent
legal and policy framework'.
The committee notes that the Joint Committee recommended that a Modern
Slavery Act should specifically include:
[R]eferencing in one location Australia's existing modern
slavery offences as outlined in Division 270 and 271 of the Criminal Code Act
Guidance material and review of the
Act after three years
Some stakeholders emphasised that guidance material explaining the
requirements of the bill should be clear, comprehensive, and relevant to
business stakeholders. The department reassured the committee that:
In terms of implementation, should the parliament pass the
bill, we will continue to work closely with business and civil society to
implement the reporting requirement. Over the next five months the department
will develop detailed guidance to support the reporting requirement. This will
include case studies, explanation of key definitions, best practice templates,
information about modern slavery risks and step-by-step instructions. It will
include advice on what business can do and what support they can access if they
identify instances of modern slavery. The drafting of the guidance will be
informed by a small expert advisory group of business and civil society. As I
mentioned, we've got quite a number of interested stakeholders that we've been
working with for a prolonged period. We expect to make the draft of the
guidance available for public comment.
There was broad support for a review of the Act three years following
its enactment. However, a number of stakeholders considered that the bill
should be amended to stipulate the terms of this review, including suggested
amendments contained in evidence to this inquiry. Other submitters also called
for a rolling review process, following the initial review after three years.
The department has been clear in its evidence that the three-year review
would consider whether there is an emerging need for a commissioner, the compliance
rates of reporting entities and the quality of statements, and the
appropriateness of the $100 million reporting threshold. The department has also commented that the Commonwealth is yet to finalise its
response to the full recommendations of the Joint Committee report, including
regarding a compensation scheme.
This bill represents a significant step forward in Australia's efforts
to address the global challenge of modern slavery, and the significant crimes
and human rights abuses that it involves.
The requirement for entities to report on the risks of modern slavery in
their supply chains, and the publication of these on a central repository, will
transform how the Australian businesses community responds to the challenge of
modern slavery, and allow consumers to access information about how the
products they buy are produced. This will drive a 'race to the top', as
businesses compete for the support of investors and consumers.
Evidence received by the committee overwhelmingly commended the bill's
provisions and its intent. Submitters and witnesses repeatedly noted the work
of the Government in developing this bill, the powerful effect of bipartisan
goodwill of the Parliament, not least in the Parliamentary Joint Committee, and
the depth of consultation with stakeholders undertaken by the Commonwealth.
The committee notes that many witnesses and submitters saw the bill as a
good 'first step' in addressing the critical issue of modern slavery, even
those that suggested potential amendments.
In this regard, much of the evidence received noted the general consensus
on the need for and value of a Modern Slavery Act among stakeholders and the
general public, and encouraged the Parliament to prioritise passing the
legislation with as little delay as possible.
Proposed amendments in evidence
Noting the widespread support for the bill and its intent, many
witnesses and submitters proposed particular amendments. The committee
understands that some of these proposed amendments reflect recommendations made
by the Joint Committee report, Hidden in Plain Sight, and notes that the
Government is still working on its full response to that report.
The bill also includes a provision for the Act to be fully reviewed
three years following its enactment, which would provide an opportunity to evaluate
its design, implementation and early outcomes. The review will also allow the
Commonwealth to revisit both the proposals of the Joint Committee, and the
views of stakeholders who informed this inquiry, alongside evidence and data
gathered from the implementation of the Act and two complete reporting cycles.
As stated by the department, this would include rates of compliance, quality of
reporting, numbers of entities required to report, and indication of reform
measures that have had outcomes in the Australian business community's supply
A statutory anti-slavery officer
Many witnesses and submitters argued that the bill should provide for a
statutory officer to coordinate, play an advocacy role for, and advise
stakeholders in relation to the new anti-slavery Act. It was noted that the UK
commissioner has played a central role in the implementation of their
anti-slavery legislation, and that a key recommendation of the Joint Committee
was that a commissioner also be part of the Australian framework.
Rather than a commissioner, the Australian model incorporates a Business
Engagement Unit, which would seek to advise and inform stakeholders about their
obligations, as well as oversee the implementation of the Act. The department
commented that this unit would be better positioned to drive the implementation
process than a commissioner, given the focus of the Australian Act on supply
chain reform and oversight, rather than the anti-trafficking issues faced in
While the committee considers a Business Engagement Unit will help
drive the implementation and operation of the new reporting requirement, it is
nonetheless of the view that an independent statutory officer would complement
the Unit’s work and go further still in ensuring the integrity of the new regime,
provide advocacy and support, and provide important feedback for the three year
review. In light of evidence received and the Joint Committee’s findings, this
committee considers that the bill should be amended to include a statutory
officer to support the implementation and operation of the Act. This officer
should be responsible for the duties detailed in recommendation 6 of the Hidden
in Plain Sight report, as outlined at paragraph 3.3. of this report.
The committee received contrasting views on whether the bill should
include provision for penalties. Whereas some argued that industry-driven
compliance rates would be low without penalties, others suggested that
compliance standards would be more rigorous and meaningful without a penalty regime.
The committee notes that the lack of a penalty regime makes the bill consistent
with similar legislation in the UK, and in some parts of Europe and the US, and
that it is designed to encourage a 'race to the top', rather than set up a
coercive punishment regime that may be counter-productive for compliance and
the quality of reporting statements.
The committee is not averse to the inclusion of a penalty scheme but is
of the view that any consideration of the potential efficacy and scope of a
penalty scheme would most usefully be conducted as part of the statutory
three-year review of the Act, with the benefit of the substantial data that
will have been amassed by that time regarding the Act generally and compliance
Threshold for compliance
There was some debate in evidence about whether the bill's
$100 million compliance threshold was appropriate. Some argued it should
be lifted to $250 million for the initial stages of implementation to build a
culture of compliance; others suggested a $25 million threshold, which
would capture a larger number of entities in the reporting requirement. A
number of submissions also discussed the adoption of a risk-based approach, to
target industries with a higher risk of slavery in their supply chains.
On balance, the committee supports the $100 million threshold in the
bill. This will initially capture over 3,000 large corporate and government
entities in reporting requirements. In turn, these large companies will drive
reform in smaller businesses that are part of their supply chains, without
overburdening these smaller entities with significant regulatory burdens and
costs of their own.
Again, the committee notes that the review of the Act would be able to reconsider
the threshold, and the potential benefits and challenges of adopting a
risk-based approach. This review will have benefit of three years of data and
evidence on compliance rates, reporting standards and outcomes to evaluate this
matter more fully.
List of entities
Regarding the list of entities, the committee notes that there was
widespread support for this measure, which will make the Australian Act more
robust and transparent than the UK equivalent.
Some submitters advised that compliance statements should be required to
be available on the websites of entities, as in the UK. The committee notes
that any entity would be able to include its statement on its public-facing
website, and expects many will choose to do so voluntarily.
Others advocated for the Commonwealth to take a more proactive
approach, including that it develop a public list of liable reporting entities,
or public list of entities in breach of reporting requirements.
It was also canvassed that the government could write to all potentially
liable entities identified using ATO tax data, to advise them that they would
be considered as required to report, unless they could reasonably show
The department has submitted that a definitive public list of liable
entities would be very difficult to develop and resource-intensive to maintain.
Additionally, it is clear that naming non-compliant entities under such a
measure would come with a significant financial and reputational risk, should
the Commonwealth misidentify a company as being non-compliant.
However, the committee understands that the processes adopted by the
Business Engagement Unit are yet to be finalised, and that they could
potentially incorporate the development of a list of entities that may be
required to report, and using this list to alert and educate the sector about
responsibilities under the Act.
The committee encourages the Commonwealth to consider using ATO data to
develop such a list, and use it to engage and educate stakeholders in order to
build good compliance cultures.
Regarding a compensation scheme for victims of modern slavery, the
committee notes that this was a recommendation of the Joint Committee, and that
the Commonwealth has not yet finalised its response to this report, as
indicated by the department.
Regarding harmonisation between jurisdictions, the committee shares the
concerns of submitters about potential duplication between the Commonwealth and
NSW schemes. The committee expects that the Commonwealth will engage the states
and territories on this matter, including through COAG, to ensure the
harmonisation of reporting criteria and processes, to minimise confusion and
the regulatory burden on reporting entities. This should include encouraging jurisdictions
to meet reporting requirements of the Act where their entities meet the $100
Regarding guidance material, the committee is reassured that the
Commonwealth would work with business and civil society to implement the bill,
which would include detailed guidance materials being developed in consultation
The committee notes Recommendation 13 from the Hidden in Plain Sight report of the Joint Standing Committee on Foreign Affairs Defence and agrees
that provision should be made to assist reporting entities in not having to
provide an annual Modern Slavery statement multiple times in multiple
jurisdictions. The committee is persuaded that the submission of a compliant
Modern Slavery Statement in one jurisdiction should be understood to constitute
compliance in all relevant jurisdictions excepting where a request for further
information relates to matters not addressed in the submitted report.
The committee notes the importance of defining modern slavery
comprehensively in the Act, as recommended by the Joint Committee's report, Hidden
in Plain Sight.
The committee recommends that the Government work towards building a
list of 'reporting entities', and to publish compliance standards publicly, in
order to test the proposition that 'reputational risk' is a sufficient
motivator for reporting entities to comply with the requirements of the Act.
The committee further recommends that lists of entities that do
report, including entities outside the compliance threshold who report
voluntarily, should be published publicly.
The committee recommends that an independent statutory officer be
appointed to support the operation of the Modern Slavery Act and be charged
with the duties detailed in recommendation 6 of the Joint Standing Committee on
Foreign Affairs Defence and Trade Hidden in Plain Sight report (see
paragraph 3.3 of this report).
The committee recommends that the statutory three-year review consider
all aspects of the Act, with particular attention to compliance thresholds and
compliance standards, and that the review be required to consider whether a
mandatory penalty regime is required, drawing on the evidence and data gathered
through the first three years of the Act's operation. The committee
acknowledges that it may be shown that penalties are not needed.
The committee recommends that the Modern Slavery Bill be amended to
include, in one location, reference to Australia's existing Modern Slavery
offences (as outlined in Divisions 270 and 271 of the Criminal Code Act 1995)
and to offences relating to fighting modern slavery such as offences relating
to sexual and labour exploitation under the Migration Act 1958.
Subject to the above recommendations, the committee recommends that the
bill be passed.
the Hon Ian Macdonald
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