Australia’s long-awaited Modern Slavery Act passed into law at the end of last month, putting Australian companies on notice to start examining the human impacts of their supply chains.
The rules require businesses operating in Australia with an annual consolidated revenue of $100 million or more to undertake mandatory reporting on the steps they are taking to identify and address Modern Slavery risks in their own operations and supply chains, as well as the supply chains and operations of any controlled entities.
Legal experts Norton Rose Fulbright said it expects the first reporting year will be the 2019-2020 financial year, although companies operating according to foreign financial years, such as the US financial year, may need to report earlier.
The Law Council of Australia welcomed the news that the bill has finally been passed, after years of advocacy in the space by its own members and other organisations including human rights organisations such as the Freedom Partnership and sustainability advocates including the Supply Chain Sustainability School.
“The Law Council has long advocated for a Modern Slavery Act, because we believe it is necessary if Australia is to play its part in eliminating slavery and slavery-like conditions,” Law Council of Australia President, Morry Bailes said.
“Too often we are tempted to think of slavery as a relic of the past. But the truth is there are millions of people today held in slavery, and that includes in Australia.
“Introducing accountability into the supply chains of large organisations will go a significant way toward mitigating the scourge of modern slavery.”
Mr Bailes said the introduction of an Anti-Slavery Commissioner would improve the new regulatory regime. A commissioner could act as a point of contact, and provide education and outreach to stakeholders including business, law enforcement and civil society.
The Law Society is also among those who have called for the Act to include a penalty regime, an element that is currently missing from the new rules.
“The most effective way to ensure company compliance would be to include substantial penalties for non-compliance,” Mr Bailes said.
The next steps for the property sector now the Act is law are clear, Robin Mellon, chief executive of the Supply Chain Sustainability School told The Fifth Estate.
Companies in the sector need to understand what modern slavery means and whether they will need to make an annual statement.
They also need to know where modern slavery risks may exist in their supply chains, work out how to manage those risks better, take collective responsibility for improvements over time, and “remember this legislation is primarily about people not dollars.”
The important thing is to “start straight away.”
Mr Mellon summed up the key areas companies need to focus on in coming years in order to react to the Act in the most appropriate way:
- Resources – use current learning resources to raise awareness including the Supply Chain Sustainability School’s free resources.
- Policies – make sure your organisation’s policies hang together, from your Human Rights Policy to internal or external Procurement Policies, Vendor Codes of Conduct, Sustainable Procurement etc.
- Contracts – remind suppliers of their human rights obligations and expectations through wording in tenders, agreements and contracts, based on collaboration rather than passing the risk or responsibility along.
- Measurements – know the risks involved, and make sure you measure, assess, manage and use available tools, audits and whistleblower mechanisms to improve your supply chains over time.
- Investigations – don’t rely on audits as they may only show you one aspect or one version of the truth – undertake your own investigations, interview workers through your supply chains, ask questions freely, make unannounced visits, ask for more details.
- Accountabilities – transparency is paramount, rather than perfection – and there is a wave of transparency coming to all of our supply chains around payment terms and health and safety, not just human rights.
- Remediations – think through how you might put things right for people found in conditions of modern slavery, whether through jobs, financially, or broader systematic change – how can you make things better for people over time?