Poor report card on modern slavery compliance acknowledged with $8m to implement Anti-Slavery Commissioner

Cilla Robinson, Alexandra Armstrong-Millar
12 May 2023
Time to read: 1.5 minutes

The Government has allocated $8m in the Federal Budget to implement an Anti-Slavery Commissioner, holding true to its pre-election promises of tightening up Australian companies' compliance with modern slavery laws.

As part of the Labor Government's Tackling Modern Slavery election commitment, the Federal Budget 2023-24 included $8 million to establish an Anti-Slavery Commissioner to galvanise compliance with the Modern Slavery Act 2018 (Cth), monitor supply chains and guard against exploitation of vulnerable workers in Australia and overseas. The funding will be spread over four years ($2 million per year).

The Act currently confers limited regulatory power to enforce the requirement that companies with a consolidated revenue of at least $100 million within a reporting period submit a statement each year reporting on risks of modern slavery and the actions taken to address those risks.

Non-complying entities may be named and shamed, with the Minister publishing details of non-compliance on the Modern Slavery Register, however, save for potential reputational damage, there are currently no real adverse consequences of inadequate reporting. Conceivably, this is one of the main drivers as to why we are seeing many reporting entities take a bare minimum approach to compliance under the Act, and not adequately addressing all mandatory criteria in their statements.

The establishment of the Anti-Slavery Commissioner is an additional enforcement measure. Details of the Commissioner's functions are currently limited, but we expect they will largely reciprocate those of the Commissioner under the NSW legislation, which include:

  • promoting action to combat modern slavery;
  • identifying and providing assistance and support to victims;
  • giving advice;
  • education and training about action to prevent, detect, investigate and prosecute offences involving modern slavery;
  • monitoring reporting and the effectiveness of modern slavery legislation; and
  • raising community awareness of modern slavery.

The Attorney-General also announced that the Government's election commitment includes introduction of penalties for non-compliance with the Act. We expect to see further action on this front shortly once a report on the three-year review of the Act is tabled in Parliament. Penalties will tangibly improve the approach to modern slavery compliance by those Australian businesses that are currently treating reporting as a box-ticking exercise.

Getting ready for increased enforcement of modern slavery laws

Labor's efforts to strengthen Australia's anti-modern slavery regulation are gaining traction; though the devil will be in the detail, we will have some clarity once a Bill is introduced to Parliament.

With reforms on the horizon, businesses should be aware of the Government's efforts to strengthen regulation. Companies should take pre-emptive steps now to enhance their modern slavery reporting and compliance processes to avoid being on the backfoot when the changes are implemented by the Government.

In particular, following the Paper Promises report published in February 2022, businesses should start by increasing efforts to properly monitor and trace operations and supply chains so that risks of modern slavery can be appropriately identified, noting the report found over half of the sample companies that were examined did not identify obvious modern slavery risks.

Secondly, businesses should be considering any action that was planned to be undertaken over the next reporting period to address modern slavery risks included in previous statements, and what the organisation has achieved to deliver on those plans.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.