The first reporting period deadline for businesses captured under the Modern Slavery Act 2018 (Cth) (Act) is fast approaching on 31 December 2020.
So what does this mean for you and your business?
Did you know that Australia now has strict laws in place that require certain businesses to comply with mandatory modern slavery reporting requirements? If you’re not aware of the Act or its reporting criteria, we’re here to help.
What is ‘modern slavery’?
‘Modern slavery’ describes situations where a person or entity uses coercion, threats or deception to seriously exploit victims and undermine their freedom.
- human trafficking;
- forced labour;
- debt bondage;
- deceptive recruiting for labour or services;
- forced marriage; and
- the worst forms of child labour.
The importance of legislating against these kinds of practices is emphasised in a globalised world, where the various links in global supply chains are not always clear.
Is your business captured?
Australian entities or entities that carry on business in Australia with a minimum annual consolidated revenue of $100 million must prepare and submit an annual Modern Slavery Statement to Australian Border Force.
Entities may also volunteer to comply with reporting requirements.
New South Wales has also passed its own Modern Slavery Act 2018 (NSW) that captures entities with employees in NSW with an annual turnover between $50 million and $100 million, however this is not yet in force.
The Victorian Government’s Supplier Code of Conduct also now specifically refers to the modern slavery laws and expects suppliers to report any modern slavery risks within their supply chains and address those risks.
Any company doing business with the Victorian Government may also need to provide a statement.
What does a statement need to include?
The Modern Slavery Statement must identify, assess and address any modern slavery risks in your business or organisation’s supply chains and global operations.
Section 16 of the Act sets out the mandatory criteria for Statements. These include:
- the identity of the reporting identity;
- the structure, operations and supply chains of the reporting entity;
- the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls;
- the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks, including due diligence and remediation processes;
- how the reporting entity assesses the effectiveness of such actions;
- the process of consultation with any entities the reporting entity owns or controls or with which it is issuing a joint slavery statement; and
- any other information that the reporting entity, or the entity giving the statement, considers relevant.
The Statement must be approved by the board of directors or equivalent and signed by a director.
Statements must be submitted to Australian Border Force to be published on the on-line Modern Slavery Statement Register.
When are statements due?
Statements must be submitted within six months after the end of the entity’s financial year and must report on activities undertaken during that financial year.
So if your business’ annual financial reporting period is between 1 January 2020 and 31 December 2020, your statement is due by 30 June 2021.
This years’ deadlines have been extended due to COVID-19 as follows:
- If your annual financial reporting period is 1 April 2019 to 31 March 2020, your statement is now due by 31 December 2020.
- If your annual financial reporting period is 1 July 2019 to 30 June 2020, your statement is now due by 31 March 2021.
What happens if you don’t comply?
The Minister can issue a request to the entity requiring an explanation for why that entity did not comply with their reporting obligations, or dictate remedial action. If the entity still fails to comply, the Minister may publish the non-compliance on the public register.
How can KKI help?
The reporting requirements are onerous and in many cases, extremely time consuming.
We are here to work with you to prepare your Modern Slavery Statement and help ensure that your business is keeping up with its reporting obligations.