Norton Rose Fulbright LLP

12/04/2024 | News release | Distributed by Public on 12/03/2024 22:22

The Australian Government’s response to the Modern Slavery Act Review

This article was co-authored with Yasmine Sahihi.

On 2 December 2024, the Commonwealth Government published its long-awaited response to the review of the Modern Slavery Act 2018 (Cth) (Act) conducted by Professor John McMillan AO (the Review).1 By way of background, the Review formally commenced in August 2022 with an extensive consultation process involving 65 engagements, 136 written submissions and 496 responses to the online survey for reporting entities. Professor McMillan's report was tabled in Parliament on 25 May 2023.

In short, the Government agrees in full, part, or in-principle, to 25 of the 30 recommendations from the Review. However, the response has been met with a level of criticism given the fact that the Albanese Government, when in opposition, was vocal in its commentary that the Act "lacked teeth" and made an election commitment to strengthen the legislation. When given the opportunity to give the Act "teeth", the response was to defer to further consultation.

We summarise the Government's response to some of the key recommendations below.

Key recommendation from the Review Status Government's response

Establishment of an Australian Anti-Slavery Commissioner

The Review recommended that the Commissioner be:

  • Responsible for monitoring compliance with the Act and publishing regulatory standards and guidelines for preparing modern slavery statements.
  • Empowered to declare high modern slavery risk areas and requiring entities to report in their modern slavery statements on actions taken to address these risks.
Adopted, in part

In response to the Review, the Government established an Australian Anti-Slavery Commissioner.

Former Senator for Western Australia Mr Chris Evans commenced a five-year term as Australia's first Anti-Slavery Commissioner on 2 December 2024.

The Government has not adopted the recommendation to grant the Commissioner investigative or enforcement powers, limiting the Commissioner's role to supporting entities in addressing modern slavery risks in their operations and supply chains.

Click here for our update on the role of the Commissioner.

Imposing penalties for non-compliance

The Review recommended:

  • Making it an offence for a reporting entity to fail to produce a modern slavery statement or to knowingly including materially false information in a modern slavery statement.
  • That failing to implement a due diligence system and providing a description of that system should be an offence, subject to a civil penalty.
Progress to consultation with stakeholders

The Government has committed to consulting with stakeholders on the potential introduction of civil penalties for:

  • Failing to produce a modern slavery statement,
  • Providing false information in a modern slavery statement, or
  • Failing to comply with a request for specified remedial action.
Additionally, consultations will explore how regulatory powers-such as issuing infringement notices, entering into enforceable undertakings, or utilising information-gathering powers-could be used to address non-compliance as an alternative to court proceedings.

Introduction of a due diligence obligation

The Review recommended:

  • Reporting entities establish a due diligence system for modern slavery, with non-compliance constituting an offence.
  • It would be an offence to fail to include a description of the due diligence processes undertaken during the reporting year in an entity's modern slavery statement.
Progress to consultation with stakeholders The Government has committed to consulting with stakeholders on the potential introduction of a due diligence system, considering the evolving regulatory landscape where mandatory due diligence is increasingly recognised as a critical tool to mitigate modern slavery and address broader human rights and environmental concerns.

Expanding the mandatory reporting criteria

New mandatory reporting criteria which would require entities to report on:

  • Modern slavery incidents or risks identified by the entity during the reporting year.
  • Grievance and complaint mechanisms made available by the entity.
  • Internal and external consultation undertaken by the entity during the reporting year on modern slavery risk management.
Progress to consultation with stakeholders The Government has committed to further consultation with stakeholders to assess the social, business, and financial impacts of the proposed changes.

Lowering the reporting threshold to entities with a consolidated revenue of $50 million

The current threshold is $100 million. 		Not accepted The Government will not lower the reporting threshold to $50 million but will reconsider the appropriate threshold at the next review of the Act.

Noting the likelihood of a Federal election taking place in March or May 2025, it is unlikely that a bill introducing changes to the Act will be introduced in the remaining sitting weeks before the election date. Although the Act was introduced by the Liberal government, it remains to be seen whether the current opposition retains the appetite to progress the recommendations should it form government.

Footnotes

1

Australian Government response to the review report of the Modern Slavery Act 2018 (Cth), Australian Government, 2024.