Following on from anticipated regulatory changes contemplated in our recent article Modern Slavery | a shift away from box-checking to real impacts for business, the election of an Australian Labor Party (ALP) government makes it more likely that Australia's modern slavery laws will be strengthened.
In accordance with the ALP's proposed Policy, and with the likely support of a cross-bench which endorsed stronger action, several increased measures are likely to be introduced. The measures could include:
- the appointment of an independent Anti-Slavery Commissioner;
- official recognition of countries, regions, industries and products with a high modern slavery risk and additional obligations imposed on companies importing from these countries to prove goods are not made with modern slavery; and
- amendments to the Modern Slavery Act 2018 (Cth) (Modern Slavery Act) to impose penalties for non-compliance with its reporting requirements.
Appointment of an Anti-Slavery Commissioner
Under the proposed Policy, an Independent Anti-Slavery Commissioner (Commissioner) would be appointed to work alongside the Australian Border Force, AUSTRAC and the Australian Sanctions office, and an office within the Attorney-General's Department would be established. The Commissioner would have several responsibilities, including publishing an annual list of countries, regions, industries and products recognised as having a high risk of modern slavery.
The Commissioner would also be responsible for monitoring the effectiveness of actions taken by all Federal and State institutions with respect to addressing modern slavery, and increasing outreach and information-sharing in consultation with international partners.
Amendments to the Modern Slavery Act
More onerous obligations would be placed on companies who import / procure products or services from the locations listed by the Commissioner, with the importer being required to prove that the acquired goods are not made with forced labour. Given the insidious and hidden nature of modern slavery in modern supply chains, this requirement would pose challenges in implementation and monitoring.
The ALP also proposes to stop the current 'box-ticking' approach to modern slavery compliance through introducing increased compliance measures under the Modern Slavery Act. While there are currently no penalties for failing to submit a modern slavery statement where an entity meets the statutory reporting thresholds, implementation of this Policy would see penalties introduced for non-compliance with the mandatory reporting requirements under the Modern Slavery Act. As a result, entities will need to be cognisant of whether the reporting requirements apply to them and, if so, ensure that compliant modern slavery statements are submitted for each reporting period. For more information on the threshold and reporting requirements under the Modern Slavery Act, read our article on Modern Slavery Reporting – A year in review.
Implementation of the Policy would also see the introduction of new mandatory reporting requirements with respect to any company exposure to "specific issues of pressing concern", highlighting that this will include Uyghur forced labour. These amendments are set to occur via consultation with stakeholders, including business and advocacy groups.
Several additional measures are also intended to be taken to address modern slavery in Australia, including:
- consideration of targeted sanctions on foreign companies, officials and other entities who are known to be directly profiting from forced labour and other human rights abuses;
- the allocation of additional resources to support the Ambassador to Counter Modern Slavery, People Smuggling and Human Trafficking in the Department of Foreign Affairs and Trade. The boost in resources is aimed at supporting the Ambassador to build awareness and assist countries in their efforts to strengthen responses to modern slavery; and
- an audit of the Federal Government's supply chains and procurement procedures, which will be made available to the public.
There is no indication at this stage of when these measures intend to be introduced, including whether any will apply retrospectively, nor is there an indication of the extent of penalties for non-compliance. Entities should be conscious of these potential upcoming changes and pre-emptively review their supply chains to identify potentially high risk suppliers, in preparation for the potential introduction of more onerous obligations. For advice and assistance in relation to ensuring that your company is operating in compliance with the Modern Slavery Act, please contact our team.