Modern Slavery legislative reform: issues paper produced for general public consultation

On 22 August 2022, the Federal Authorities introduced for general public session the Difficulties Paper for the statutory critique of the Modern day Slavery Act 2018 (Cth) (Act) (Assessment). This Issue Paper follows the Terms of Reference for the Overview which was released by the Australian Border Pressure.

The Review commenced on 31 March 2022 and is being led by Professor John McMillan, a Professor at the Australian National University, supported by the Australian Border Pressure and the Legal professional-General’s Section.

The Critique will consider the operation of the Act and no matter whether any further measures are essential or desirable to boost the operation of the Act or compliance with the Act. The Challenges Paper information particular concerns that will be viewed as in the course of the Critique, like irrespective of whether:

  • the reporting periods, reporting deadlines and AU$100 million yearly consolidated profits threshold are proper
  • the required reporting requirements which are established out in part 16 of the Act are ideal and
  • it is fascinating or needed for an independent body, these kinds of as an Anti-Slavery Commissioner, to oversee the implementation and/or enforcement of the Act.

Community feedback on the Problems Paper is due by 22 November 2022.

Qualifications to the Act

The Act founded a countrywide fashionable slavery reporting prerequisite which necessitates entities carrying on enterprise in Australia with yearly consolidated profits of at least AU$100 million (Reporting Entities) to report on how they are addressing and avoiding contemporary slavery pitfalls in their functions and provide chains.

Reporting Entities comply with the Act by making ready annual contemporary slavery statements, which are released by the Federal Govt on the Modern-day Slavery Statements Sign up for transparency.

We have formerly prepared on how Reporting Entities may comply with the Act (below) and the affect that Covid-19 has had on reporting necessities (here).

Issues Paper

As the Overview is an end-to-stop review of the Act, there are quite a few challenges reviewed in the Challenges Paper and we examine only a several unique troubles underneath.

Reporting threshold

The Federal Govt has asked for community feedback pertaining to no matter whether the reporting threshold of AU$100 million consolidated once-a-year revenue is an suitable threshold to figure out which entities are expected to submit an once-a-year fashionable slavery statement. Several have argued that the threshold must be decreased. A figure of AU$50 million is generally prompt but other thresholds have been suggested much too. We observe the unique kind of the NSW Modern-day Slavery Act that was passed by Parliament involved an AU$50 million threshold, though the non-public sector reporting necessities beneath the NSW legislation have subsequently been removed.

Arguments for the AU$100 million threshold are that the get the job done required to put together an yearly modern slavery assertion can be substantial, and it is ideal to concentration on firms that have the ability to take that work on board. On the other hand, other individuals argue that the reason of the reporting need is to drive significant transform, and consequently the obligation to put together a fashionable slavery assertion should really implement to additional entities. Modelling from the Office of Residence Affairs on this concern suggests that, in tough conditions, there would be a 19% improve in the amount of entities needed to report below the Act for just about every AU$10 million reduction of the reporting threshold.

The Problems Paper notes that a criterion other than once-a-year consolidated earnings could be adopted. Solutions for various criterions are not constrained in the Challenges Paper, so community feed-back could consist of proposals for a number of new criteria, these kinds of as Reporting Entities importing from markets that have a large chance of modern day slavery.

In our practical experience doing the job with diverse Reporting Entities across a selection of distinctive sectors, our observation is that there is not essentially a immediate correlation between the measurement of an entity and its exposure to modern slavery dangers – even though, obviously, greater Reporting Entities would, usually speaking, be improved equipped to comply with the Act.

The advantage of utilizing a income threshold as the marker for when a business enterprise is a Reporting Entity is the relative simplicity in its application. The Challenges Paper does state that adopting an fully new criterion for the reporting need could open a array of definitional problems, which could in switch disrupt the easy procedure of the Act.

Definition of modern-day slavery

The Federal Government has also questioned for community feedback relating to the appropriateness of the ‘modern slavery’ definition less than the Act for the function of the mandatory reporting requirements.

The recent definition of ‘modern slavery’ references the definition of modern day slavery in the Prison Code Act 1995 (Cth), which sets a regular of felony prosecution, as well as descriptions of human trafficking and baby labour in two global conventions. As a final result, the definition is reasonably specialized.

The Issues Paper asks regardless of whether far more generic phrasing should be made use of in the Act, even so it is mentioned that these types of an amendment could potentially increase problems regarding what accurately must be documented by Reporting Entities.

In our practical experience, Reporting Entities do not rely on complex definitional arguments to delineate their obligations underneath the Act, or extra usually at law. Engaging in conduct that sits at the boundaries of what may possibly or could not represent “modern slavery” is inherently large possibility. Reputational injury could nevertheless take place even exactly where an entity is sitting down on the correct-facet of that boundary, and the repercussions for erring on the wrong-facet of that boundary are probably severe.

In this sense, a additional normal, much less specialized, strategy to defining contemporary slavery might make little change to how Reporting Entities strategy their reporting obligations below the Act, even though we notice that some of the present-day types of modern slavery may well not look straight away apparent if the current references to the Felony Code provisions are dispensed with. For instance, the latest array of contemporary slavery offences includes offences that drop outdoors of Division 270 of the Criminal Code which is titled “Slavery and slavery-like offences” – for instance, organ trafficking. The relevance of some of these modern-day slavery offences to most, or nearly all, of Australian enterprises is also a dilemma that the Challenges Paper seeks commentary on.

Owing diligence necessities

A different key difficulty highlighted in the Problems Paper is irrespective of whether the Act should set out required because of diligence actions for Reporting Entities.

The Act at this time involves Reporting Entities to describe the ‘due diligence and remediation processes’ that they use to assess and deal with contemporary slavery dangers. On the other hand, there is no precise due diligence course of action that is expected beneath the Act. More, the present-day assistance that is posted by the Australian Border Force on what good apply appears to be like is relatively sparse.

The Federal Govt is looking for public opinions relating to regardless of whether thanks diligence should be defined under the Act, or no matter whether there are other ways thanks diligence can be inspired underneath the Act.

In our experience, Reporting Entities make conclusions concerning because of diligence based on the mother nature of their company and functions, the mother nature of their suppliers, the market in which they run, as properly as their possess size and methods. It is difficult to conceive of a 1-dimensions-fits-all technique that might be mandated for modern slavery due diligence. However, extra specific guidance from either the Australian Border Power or the Anti-Slavery Commissioner would frequently be welcome, furnished that there remained flexibility for Reporting Entities to determine what is most correct for their organization.

Civil penalties

The Troubles Paper also raises the issue of no matter if the Act need to impose civil penalties or sanctions for failure to comply with the reporting necessities. The Problems Paper reveals substantial engagement by business enterprise and civil culture with the Act, with a lot more than 4,000 yearly modern day slavery statements currently being released on the Contemporary Slavery Statements Sign-up. However, there have been compliance challenges. The Federal Federal government undertook an evaluation of compliance with the Act which discovered that 41% of statements released in the initial reporting cycle have been assessed as possible to be non-compliant owing to not sufficiently addressing all the obligatory reporting requirements. Of the statements revealed in the next reporting cycle, 28% had been assessed as non-compliant.

The Federal Federal government has sought community suggestions relating to no matter if penalties need to be released for non-compliance with the Act, and if so:

  • what particular conduct (or omission) should be penalised
  • what variety of penalty really should use and
  • what process must be adopted when making use of a penalty.

We take note that the Act at the moment empowers the Minister to “name and shame” Reporting Entities that fall short to comply with their reporting obligations less than the Act, although the Modern Slavery Register doesn’t look to currently checklist any non-compliant Reporting Entities, notwithstanding the large fees of non-compliance stated in the Troubles Paper.

Given that the “name and shame” powers do not look to have still been utilised, we issue irrespective of whether it is untimely to request whether or not the recent powers are sufficient or not – except, of training course, there is a fundamental defect in the “name and shame” powers which explains why they have not nevertheless been utilised. We would also dilemma no matter whether the greater means demanded to put into practice a penalty routine underneath the Act (and the consequent better probability of court docket action) is the very best way of making certain compliance with the Act.

The purpose of an Anti-Slavery Commissioner

Just one other critical problem mentioned in the Challenges Paper is whether an Anti-Slavery Commissioner must engage in a purpose in overseeing and imposing the Act’s present day slavery reporting need. The Federal Govt has already dedicated to creating an unbiased Anti-Slavery Commissioner, with the intent that it will coordinate work across market and government in the aim of getting rid of modern slavery in Australia and world wide supply chains. Nonetheless, no matter if it will oversee the implementation or enforcement of the Act is even now to be decided.

We note that NSW has an independent Anti-Slavery Commissioner, although it may possibly be much too early to gauge any lessons from the NSW working experience.

Following ways

The three-thirty day period session period for the Overview closes on the 22 November 2022. To have interaction in the consultation approach, associates of the public can:

  • complete an on the net survey relating to the Problems Paper or
  • draft a prepared submission in response to the Difficulties Paper.

Moreover, during the general public session interval, Professor McMillan will be conducting the two in man or woman and on the net consultation periods relating to the Evaluate.

The Review will be finished within just 12 months of the graduation of the Act, which will be in March 2023.

Sherri Crump

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