Prior to COVID-19, entities were to be on track to lodge their Modern Slavery Statement(s) by 31 December 2021 (or earlier, depending on where their end of financial year falls) under to the Modern Slavery Act 2018 (Cth) (Federal Act). Following the declaration of the COVID-19 pandemic earlier this year, deadlines have now shifted to account for the disruption and complications caused by COVID-19. This article outlines changes in modern slavery reporting due to COVID-19 and also explores further developments in this space.
To brush up on the basics, see our previous article outlining the introduction of modern slavery laws in Australia and obligations of reporting entities.
If an entity generates annual consolidated revenue within Australia of at least AU$100 million for the reporting period, it will likely be caught by the Federal Act and will be subject to the various requirements, including reporting activities within its supply chain, for each financial year. Under the Federal Act, the “reporting period” is simply the relevant financial year applicable to that entity.
If the Federal Act applies to an entity, the entity will be required to submit a Modern Slavery Statement via the Australian Government’s Online Register of Modern Slavery Statements, now available at www.modernslaveryregister.gov.au. This Online Register is administered by the Australian Border Force, which sits within the Department of Home Affairs.
Section 16 of the Federal Act contains seven mandatory criteria which the reporting entity must address:
Note that for the purpose of the Federal Act, actions taken by the reporting entity may include the development of policies and processes to address modern slavery risks, and the provision of training for staff about modern slavery.
The first deadline for lodgement of a Modern Slavery Statement was six months after the end of the reporting entity’s first reporting period, however due to COVID-19 the first deadline has shifted.
Prior to COVID-19, entities operating on a 1 July – 30 June fiscal cycle were due to lodge their Modern Slavery Statement by 31 December 2020. For those operating on a 1 April – 31 March fiscal cycle, the due date fell on 30 September 2020.
On 28 April 2020, the Assistant Minister for Customs, Community Safety and Multicultural Affairs, the Hon Jason Wood MP, announced that the reporting deadline under the Federal Act would be extended for three months due to COVID-19 complications in local and global supply chains. In his press release, Wood MP stated: “This three month deadline extension will provide reporting entities with additional time to assess changing modern slavery risks linked to the coronavirus pandemic and help ensure that they are able to comply with their legislative obligations."
This three month extension applies to all reporting entities under the Federal Act operating on reporting periods that end on or before 30 June 2020. The extensions are as follows:
There has been no change to the deadline for submitting Modern Slavery Statements due in 2021.
It is clear that in addition to the examination of existing modern slavery risks in supply chains, reporting entities should also consider the impacts of its supply chains due to COVID-19, as it may have caused an increase in human rights violations and instances of modern slavery due to pressures of resourcing various industries that may have operated, or are still operating, in flux. For businesses that have been impacted by COVID-19, the Australian Border Force has developed a guidance tool to assist when reporting under the Federal Act, outlining “key actions entities can take to reduce the risk of vulnerable workers in their operations and supply chains becoming exposed to modern slavery as a result of COVID‑19.”
The Modern Slavery Act 2018 (NSW) (NSW Act) was passed in mid-2018 but, as at the time of writing, is yet to commence. It applies to commercial organisations with employees in the state that supplies goods and services for profit or gain and that has a total annual turnover of not less than AU$50 million. Rather than commence as passed, the NSW Act was referred to the Standing Committee on Social Issues (Committee) on 6 August 2019 for further parliamentary inquiry. Submissions closed on 4 October 2019, with a hearing conducted on 4 November 2019. Various experts and civil society groups were heard and various documents tabled for consideration for the purpose of informing the Committee on key matters, including potential inconsistencies of the proposed state regime with the Federal Act. The final report was released in March 2020 recommending that some amendments be made and enacted by 1 January 2021. The NSW Government has not yet however taken further steps to effect this recommendation, noting that if an entity is required to report under both the Federal Act and NSW Act, it is exempt from reporting under the NSW Act (as it will have already lodged a report under the Federal Act).
Tasmania has become the second state to draft modern slavery laws with the release of the Supply Chain (Modern Slavery) Bill 2020 (Tas) (Tasmanian Bill), having been introduced by Madeleine Ogilvie, Independent Member for Clark. The Tasmanian Bill defines “modern slavery” to mean “any conduct constituting a modern slavery offence, or any conduct involving the use of any form of slavery, servitude or forced labour to exploit children or other persons taking place in the supply chains of government agencies or non-government agencies.” In this case, a “modern slavery offence” is defined as any offence committed pursuant to section 270.4 or 270.1 of the Commonwealth Criminal Code, as scheduled to the Criminal Code Act 1995 (Cth).
Supply Chain (Anti-slavery) Commissioner
Much like the NSW Act, it proposes to appoint an independent Supply Chain (Anti-slavery) Commissioner, who would not be subject to the control and direction of the Premier or any other Minister in respect of the exercise of the Commissioner’s functions. The Commissioner may obtain information in the course of exercising the Commissioner’s functions, being reports or other information relating to modern slavery or suspected instances of modern slavery, and may refer any such information to an investigative or government agency that the Commissioner considers appropriate. The Commissioner must provide a report addressing his or her activities, evaluations and recommendations to the Presiding Officer of each House of Parliament within four months of 30 June 2020. The Commissioner must also maintain a register (to be available free of charge and in electronic form) that identifies any commercial organisation that has disclosed in a modern slavery statement that its goods and services are, or may be, a product of supply chains in which modern slavery may be taking place and whether the commercial organisation has taken steps to address the concern. It must also identify any other organisation or body that has voluntarily disclosed to the Commissioner that its goods and services are, or may be, a product of supply chains in which modern slavery is taking place and whether the organisation or body has taken steps to address the concern.
Duty to cooperate
The Tasmanian Bill creates a ‘duty to cooperate’ between the Commissioner and any government or non-government agency in or out of Tasmania that provides or deals with services or issues affecting victims of modern slavery, and these agencies must work in co-operation in the exercise of their respective functions.
The duty to co-operate includes, subject to any duty of confidentiality imposed by law, the following duties:
Importantly, under s 16 of the Tasmanian Bill, the person does not incur any criminal or civil liability (including liability for breaching any duty of confidentiality) for providing any information to the Commissioner if the information is provided in accordance with this Act and in good faith.
Modern Slavery Committee
The Tasmanian Bill also creates a Modern Slavery Committee, tasked with the following functions:
Modern slavery statement
Under s 24 of the Tasmanian Bill, commercial organisations are to provide a modern slavery statement for their financial year. The term “commercial organisation” means an entity that supplies goods and services for profit or gain, and has a total annual turnover of not less than AU$30 million or such other amount as may be prescribed by the regulations. The content of the modern slavery statement is to be prescribed by regulations and is to be made public. However, for entities or commercial organisations reporting under either the Federal Act or NSW Act (if passed), an exemption will be granted under the Tasmanian Bill that alleviates the need to provide a modern slavery statement.
Businesses should carefully assess whether they are caught by the Federal Act and if so, note the revised deadline for their modern slavery statement and mandatory criteria under s 16 of the Federal Act. Businesses should also consult the COVID-19 Guidelines to assess whether further work is required during its investigative processes into its supply chains. Given the objectives of the Federal Act, entities and businesses should be in a position to demonstrate genuine steps in tackling modern slavery in its various supply chains, likely exacerbated due to COVID-19. This includes performing meaningful due diligence processes across its supply chains, educating staff and assessing (or introducing, as the case may be) reporting measures to escalate instances of modern slavery in its supply chains. The Australian Border Force Modern Slavery Business Engagement Unit was established for this purpose in order to provide guidance and support to reporting entities under the Federal Act.
For those businesses in NSW or Tasmania that may be affected by the state regime, further monitoring is required as to the start date of each regime.
Overall, the production of a modern slavery statement depends in part on the success of the due diligence processes undertaken by the entity, now with further consideration of additional stressors on the supply chain due to COVID-19. To assist with this, see our updated guide on modern slavery reporting (download PDF below).