Yesterday detailed draft guidance on the Modern Slavery Act 2018 (Cth) (the Act) was released, explaining what is expected of companies in order to comply with the new laws. A copy of the draft guidance can be found here.
In summary, the draft guidance sets out:
- further clarification of the key terms and concepts in the Act along with hypothetical examples;
- practical tips on how to draft a Modern Slavery Statement including how to address each of the mandatory reporting criteria and how to prepare joint statements;
- suggestions for demonstrating how an entity can assess the effectiveness of its anti-slavery actions; and
- the main types of modern slavery risks that can exist in supply chains and the indicators to help identify those risks.
This guidance is issued in draft for the purpose of consultation. Submissions on the guidance are due by 19 May 2019.
Modern Slavery Reporting Obligations: a refresher
Modern Slavery Statements are to be filed within 6 months after the end of the entity’s financial year. This means that the first Modern Slavery Statements will likely be due for most reporting entities at the end of 2020.
Modern Slavery Statements require board approval. This means accountability for the content of Modern Slavery Statements ultimately rests with boards. Boards need to be educated about modern slavery so they can ask the right questions of management and take responsibility for the entire supply chain, including identifying possible modern slavery risks and putting in place controls.
As the first statements will cover the upcoming financial year, it is important to ensure that policies are in place well in advance to guide decision making and assessment of risk from the commencement of the reporting period.