The Modern Slavery Act 2018 represents a landmark in Australian efforts to address forced labour, human trafficking, and other forms of exploitation in business operations and supply chains. Understanding compliance requirements under this legislation is essential for Australian businesses meeting the reporting threshold.
This guide is part of our series.
Understanding Modern Slavery in Supply Chains
Modern slavery encompasses a range of exploitative practices including forced labour, human trafficking, slavery, and servitude. These practices affect millions of people globally, including in Australia and within supply chains of Australian businesses.
Australian businesses, through their supply chains, may be connected to modern slavery practices in other countries. Addressing these risks requires understanding where vulnerabilities exist and developing processes to identify and address problems.
Modern Slavery Act Overview
The Modern Slavery Act 2018 establishes mandatory reporting requirements for large Australian businesses. The Act aims to increase transparency about modern slavery risks and encourage businesses to take action.
Entities Required to Report
Businesses with annual consolidated revenue of at least AUD 100 million must submit annual modern slavery statements. The requirement applies to Australian entities and foreign entities operating in Australia.
Reporting Deadline
Modern slavery statements must be submitted within six months of the end of the financial year. For most entities, this means statements must be submitted by 31 December each year.
Mandatory Reporting Criteria
Modern slavery statements must address specific criteria prescribed by the legislation.
Entity Structure and Operations
Statements must describe the entitys structure, operations, and supply chains. This description should provide context for understanding where modern slavery risks might exist.
Risk Assessment
Entities must describe risks of modern slavery practices in their operations and supply chains. Risk assessment should consider factors including industry risks, geographic risks, and supplier-specific risks.
Due Diligence and Remediation
Statements must describe due diligence and remediation processes used to address modern slavery risks. Due diligence should be proportionate to identified risks.
Building a Modern Slavery Compliance Program
Effective compliance requires more than annual reporting. Organisations should develop comprehensive programs.
Governance and Leadership
Modern slavery compliance requires clear governance and leadership commitment. Boards and senior executives should oversee compliance programs.
Risk Assessment Process
Comprehensive risk assessment forms the foundation of effective compliance. Assessment should consider both direct operations and supply chain relationships.
Supplier Engagement
Engaging with suppliers is essential for addressing supply chain risks. Many suppliers may not have visibility into their own supply chains.
Conclusion
Modern slavery compliance requires sustained commitment and ongoing effort. Organisations that develop comprehensive programs position themselves to meet regulatory requirements.
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