Creating Responsible and Transparent Supply Chains in Australia

Production of products, goods and services in the global market place relies on a complex weave of international sourcing for components, ingredients and labour. With each country having it’s own set of labour laws it is of concern to many consumers whether they are supporting or encouraging ethical sourcing, and inadvertently supporting the growing trade in human trafficking or slave and child labour.

Most people are unaware how far a field the ingredients and components for many products may come from e.g Perhaps the bargain you just got on chocolate was made possible by child labour or the the clothing you just purchased was made in unsafe sweat shops. Elements of production that would be prohibited under Australian labour law may be allowed or overlooked under other international laws. When these issues in supply chain come to light there is public outrage.

The Australian Government has introduced legislation to make supply chains more transparent so elements of the supply chain can be readily scrutinized by consumers.

The Legislation - Modern Slavery Act 2018

At both Federal and State level, the Modern Slavery Act 2018 (the Acts) have now commenced. The objective of the Acts is to increase awareness of and assist the Australian business community in addressing the issue of modern slavery and to reduce the risk of such practices occurring.

The Acts aim to ensure that the business community create responsible and transparent supply chains to assist consumers and investors to make well-informed decisions when buying and selling goods and services from supply chains as to whether or not they are facilitating modern slavery practices.

What is Modern Slavery?

Modern slavery practices are serious crimes and major violations of human rights. The definition of modern slavery is outlined in Australian legislation in Divisions 270 and 271 of the Commonwealth Criminal Code, as well as various sections of the New South Wales Crimes Act 1900. Examples of modern slavery include activity such as human trafficking, forced marriage, slavery and slavery-like practices.

International Law - Article 3 of the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children and Article 3 of the ILO Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour provide the original and international basis for our laws.

What does it mean for business?

The Act imposes a requirement for reporting. Large businesses and other entities are required to provide the Minister with a Modern Slavery Statement annually.

This Statement must include:

- A clear identification of the entity that is providing the report;

- The entity’s structure, operations and supply chains;

- Potential modern slavery risks in the entity’s operations and supply chains;

- Actions taken by the entity to address the risks, including due diligence and remediation processes;

- How the entity assesses the effectiveness of those actions;

- Describe the process of consultation with any other entity under the entity’s control or ownership, or entity covered by a joint statement; and

- Any other relevant information.

The Statement must be signed by a responsible officer of the entity, approved by the principal governing body of the entity and provided to the Minister within six months from the end of the entity’s financial year.

Who is required to provide statements?

Under the Federal legislation, those covered are large businesses and other entities who have an annual revenue of at least $100 million AUD.

Under the New South Wales Act, commercial organisations , i.e. companies, partnerships and associations, that have employees in New South Wales, supply goods and services for profit or gain, and have an annual turnover of at least $50 million AUD, and are not a New South Wales government agency are required to provide Statements.

Entities that do not meet the requirements may volunteer to provide statements if they wish to.

What happens to Statements?

The Statements provided by entities are published online on the Modern Slavery Statements Register. These Statements can be accessed free of charge by any member of the public.

You can find the Register here

Differences between the Federal and New South Wales Acts

The New South Wales Act provides for an Anti-slavery Commissioner and Modern Slavery Committee.

The Commissioner and the Committee provide awareness, advocacy and an advice hotline for victims, along with the maintenance of the public register identifying organisations supply chains where modern slavery is taking place.

At the Federal level, the modern slavery statements are given to the Minister.

Consequences of non-compliance

The penalties for non-compliance differ between the Acts. At a Federal level, the Minister may give written request to provide explanation for failure to comply and require the entity to remedy that failure. Following this, if the failure continues, this will be published on the register or other public forum.

The New South Wales Act provides for penalties of up to $1.1 million for the following:

1. Failure to prepare a Modern Slavery Statement for each financial year;

2. Failure to publish the statement publicly; or

3. Knowingly providing false and misleading information in the statement.

The Act came in to effect on 1 January 2019 and states that it will be reviewed three years after commencement to ensure that requirements remain effective and responsive to the Australian context.

What do we need to do?

In order to protect your businesses reputation and to avoid a fine, your business may need to review policies, procedures and supply chain agreements to ensure compliance and provide awareness and training throughout the organisation.

This is general information and not advice. If you’d like to know more about how this law may affect your business contact us

For advice on this or other aspects of your business, call Voice Lawyers on (02) 92318602 or email voice@voicelawyers.com to make an appointment.

Kayte Lewis is principal lawyer at Voice Lawyers, practicing in employment and family law; a nationally accredited mediator and professional development specialist with a passion for communication and helping people find their voice.