BILLS DIGEST NO. 12, 2018–19              16 August 2018

Modern Slavery Bill 2018

Cat Barker
Foreign Affairs, Defence and Security Section 

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.

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[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.