Modern slavery legislation at the Commonwealth level in Australia is getting closer.

The Modern Slavery Bill 2018 (Cth) passed the Lower House last week. The Opposition pushed for several amendments to the legislative framework including establishing an Independent Anti-Slavery Commissioner to oversee implementation and enforcement of the legislation, the introduction of penalties on companies for non-compliance with their reporting obligations, and an obligation on the Minister to report annually on compliance by reporting entities. While none of these passed, the Opposition nevertheless supported the passage of the legislation as it currently stands.

The Bill has been introduced into the Senate with debate adjourned until the next period of sittings in mid-October 2018.

Notwithstanding the recent change of Federal Minister responsible for the Australian Government’s strategy to combat modern slavery, there remains broad and bipartisan support for the Bill and the Federal Government remains committed to having the legislation passed this year.

If you’re not at the table, you’re on the menu

Modern slavery has become one of the highest-profile business and human rights issues in Australia, with significant engagement from investors, scrutiny from civil society, and interest from across the political spectrum. Meeting the legislative requirements – and satisfying the growing market standards – will require a proactive and strategic approach to modern slavery risk assessment, due diligence, and external reporting.

To get ready for the Commonwealth legislation, which is likely to take effect in January 2019, see our Modern Slavery Action Plan.

NSW legislation

Since our blog in June 2018, there have been no updates on the NSW Modern Slavery Act 2018 – which still has not commenced operation despite being passed by the NSW Parliament on 21 June. This is likely due to stakeholder lobbying for one nationally consistent modern slavery reporting regime across Australia. In our view, this would make sense for businesses so that they do not have to comply with competing obligations under State and Commonwealth regimes (subject to any Constitutional inconsistency arguments).

The reporting obligations under the NSW and Commonwealth legislation are largely, although not entirely, overlapping. The NSW legislation allows for the NSW government to prescribe, among other things, that the NSW reporting obligations do not apply if an organisation is subject to obligations under a corresponding law of the Commonwealth. However, the big sticking points for NSW in deciding whether to cede entirely to the Commonwealth in this space are likely to be:

  • there are substantial penalties under the NSW legislation, but none under the Commonwealth regime and
  • the NSW scheme applies to organisations with a total turnover in a financial year of at least $50 million whereas the Commonwealth Bill, when passed, will only impose mandatory reporting obligations on organisations with an annual revenue of over $100 million.