What is modern slavery and what does it mean for my business?

The Modern Slavery Act 2018 enforces a national reporting standard upon certain businesses, but what does this mean for your business?
What is modern slavery and what does it mean for my business?

The Modern Slavery Act 2018 (‘the Act’) enforces a national reporting standard upon certain entities. This standard requires each entity to report to what extent, if any, they have responsibly sourced and reasonably promoted an ethical supply chain. In accordance with the Act, reports must be submitted to the Australian Border Force who will then upload the data to a publicly accessible online register.

Compliance with these reporting requirements is integral if Australian entities are to enhance the transparency of business operations and in turn, mitigate any undercurrents of modern slavery.

In this article, we explain what modern slavery is, why these reporting requirements exist, and how to ensure your business remains compliant.

What is modern slavery?

Although there is no one definition, modern slavery is described by the Department of Home Affairs as an umbrella term for circumstances where a person is coerced, threatened and/or exploited. Such circumstances include, but are not limited to, human trafficking, forced labour and child labour. Although modern slavery is most prevalent in less-developed countries, it isn’t confined to any location, industry, or business. Australian businesses can be at fault, particularly when they outsource parts of their operations.

Even if your business isn’t directly involved in modern slavery, it’s important to consider if there are indirect links. What practices do your global supply chains have in place? Do they condone modern slavery? For example, setting unreasonable deadlines for your suppliers can result in them undertaking unethical labour practices or entering into commercial arrangements with entities that do. Ansell and major United States (US) company Kimberly Clark were recently accused of modern slavery for this exact reason. Ansell used a Malaysian supplier to create their products. Although proceedings are underway in the US, it is alleged that both Ansell and Kimberly Clark were profiting off the exploitation of workers in these international factories.

What are the requirements?

Since 2019, the Modern Slavery Act has required certain entities to publicly report on how their internal and external operational processes promote modern slavery. These entities include Commonwealth, Australian and foreign businesses that operate within Australia and have a consolidated revenue of at least $100 million (for the reported financial year). Entities that do not fall within this description can elect to publish this report, particularly if they wish to enhance their public image. Such reports must be submitted for publication within six months of the entity’s end of financial year.

All statements regarding modern slavery should foster continuous improvement and must adhere to the following criteria:

  1. The identity of the reporting entity;
  2. The structure, operations, and supply chains of the reporting entity;
  3. The risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls;
  4. The actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks (including due diligence and remediation processes);
  5. How the reporting entity assesses the effectiveness of such actions;
  6. The process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and
  7. Any other information that the reporting entity, or the entity giving the statement, considers relevant.

Some of these criteria require a thorough review of the business’s operations, supply chains, policies, procedures, industry norms, and initiatives which can be a burdensome, but vitally necessary task.

Ensuring compliance

It’s incredibly important that entities required to report under the Act meet the criteria for their reporting obligations. If a business fails to submit a statement when required, it may result in Border Force requests for explanation, remedial action, or a public display of ‘failed compliance’ on the slavery register. These consequences can be detrimental to a business, particularly in a day and age where both people and businesses value ethical and conscious behaviour.

chat icon

Not a Citation HR client? To learn more about how Citation HR can support your business and streamline its people management, please reach out to our friendly team here. 

About our authors

Zaynab Aly is a Senior Workplace Relations Consultant at Citation HR. She has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.

Carla Novacevskiis a Workplace Relations Advisor based at Citation HR’s Melbourne Office. In her role, Carla tends to client queries via the HR Advice Line. She is currently completing a Bachelor of Commerce and Law, majoring in Accounting, and is passionate about expanding her knowledge through a variety of placements in multiple areas of law.

Take your business to the next level

What are you interested in?
Your data will be processed inline with our Privacy Policy.
This field is for validation purposes and should be left unchanged.