What is the Australian Modern Slavery Act 2018?
The Australian Modern Slavery Act 2018 (MSA) is legislation aimed at combating modern slavery by enhancing transparency and accountability in supply chains. The Act entered into affect January 1, 2019, and requires certain entities to report on their efforts to identify, assess, and address modern slavery risks within their operations and supply chains.
Why was the Australian Modern Slavery Act 2018 created?
The MSA was created in response to growing concerns about the prevalence of modern slavery practices, including forced labor, human trafficking, and exploitation in global supply chains. Prior to the Act, there was no unified framework in Australia to address these issues comprehensively. The legislation aims to fill this gap by compelling large entities to transparently report their efforts to mitigate modern slavery risks, thereby fostering greater corporate responsibility and encouraging businesses to take concrete actions to eliminate exploitation from their supply chains.
The Act is part of a broader global movement to enhance human rights due diligence and corporate transparency. By mandating detailed disclosures, it seeks to improve awareness of modern slavery issues, and drive business practices toward greater ethical standards, aligning with Australia’s commitment to eradicating human exploitation.
Who has to comply with the Australian Modern Slavery Act 2018?
Organizations required to comply with the Australian MSA are those with an annual consolidated revenue of AUD 100 million or more, or non-profit entities with revenue exceeding AUD 100 million. This can include entities that operate in Australia, but may have significant operations abroad, if they meet the revenue threshold.
How will the Australian Modern Slavery Act 2018 affect businesses?
The Australian Modern Slavery Act 2018 will have several impacts on businesses. Companies must disclose detailed information about their efforts to address modern slavery risks in their supply chains and operations. Meaning, businesses will need to conduct thorough risk assessments and implement robust due diligence processes to identify and mitigate modern slavery risks. Entities must prepare and submit an annual Modern Slavery Statement, which must be approved by the board and made publicly available. Companies must strengthen governance structures to oversee compliance with modern slavery obligations, and integrate anti-slavery measures into their business practices.
What are the penalties for noncompliance with the Australian Modern Slavery Act 2018?
There are currently no documented penalties for noncompliance with the Australian MSA. However, on 25 May 2023, the government tabled a report on the statutory review of the Act, introducing a recommendation to add penalties for noncompliance. So, significant quantifiable penalties will likely be introduced in the near future.
Noncompliance with the Act does have significant indirect impact, including diminished public image and stakeholder trust, increased scrutiny from regulators, potential for additional regulatory interventions, and legal challenges.
How do you comply with the Australian Modern Slavery Act 2018?
To comply with the Australian Modern Slavery Act 2018, entities should consider:
1. Reporting Obligations
- Overview: describe your structure, operations, and supply chains.
- Risk Assessment and Due Diligence: identify modern slavery risks using risk assessment and due diligence technologies within the your operations and supply chains.
- Actions Taken: detail the actions you have taken to address these risks, including policies, procedures, and due diligence processes.
- Effectiveness: provide information on how the effectiveness of these actions is measured and assessed.
- Consultation: explain any consultation with entities you own or control regarding modern slavery issues.
- Approval: must be approved by the board of directors or equivalent governing body.
2. Submission and Publication
Submit the MSA statement to the Australian Government’s Modern Slavery Statement Register, and publish the statement on your website accessible to the public.
2. Governance and Oversight
The board and senior management are responsible for overseeing compliance with the Act, ensuring appropriate measures are in place to address modern slavery risks. Designate roles or departments within the organization to oversee modern slavery compliance and reporting and implement policies and procedures to address modern slavery risks.
3. Risk Management
- Establish systems for monitoring compliance with modern slavery policies and reporting requirements.
- Develop action plans to address identified risks, such as working with suppliers to improve practices and ensuring compliance with ethical standards.
- Provide training for employees and suppliers on modern slavery risks and compliance requirements.
4. Data Collection and Reporting
- Gather data relevant to modern slavery risks and actions taken, including information from supply chain audits.
- Ensure that data reported in the Modern Slavery Statement is accurate, comprehensive, and up-to-date.
How can Craft help?
Craft’s supplier risk management solutions are designed to streamline compliance and enhance reporting. With our platform:
- Identify risky suppliers with in-depth company profiles and easily scalable due diligence
- Continuously monitor your supplier network for changes and potential violations
- Document your efforts for proof of compliance
- Collaborate and share information across teams for faster risk mitigation
Related Regulations
UK Modern Slavery Act 2015
California Transparency in Supply Chains Act
EU Corporate Sustainability Reporting Directive (CSRD)
UN Guiding Principles on Business and Human Rights
Conclusion
The Australian Modern Slavery Act 2018 represents a significant step towards enhancing transparency and accountability in corporate supply chains. By requiring detailed reporting and risk management practices, the Act aims to combat modern slavery and promote ethical business practices. Compliance involves understanding the Act’s requirements, developing robust policies and procedures, and engaging in ongoing risk assessment and reporting. Leveraging tools and expertise from providers like Craft can facilitate compliance and help businesses navigate the complexities of modern slavery regulations effectively.
For more resources on data protection and supply chain compliance, visit Craft’s compliance hub.