How well do you know your supply chain?

supply_chain

The Australian Government is proposing new legislation which will require large corporations and other entities operating in Australia to publish annual statements outlining their actions to address modern slavery in their operations and supply chains. The reporting requirements are largely based on the UK model contained in the Modern Slavery Act UK, but with some important differences.

Modern slavery will generally mean conduct that would be an offence under existing human trafficking, slavery and slavery-like offence provisions in the Commonwealth Criminal Code; for example: slavery, servitude, forced labour, debt bondage and deceptive recruiting for labour or services.

It is proposed that entities required to report will include bodies corporate, unincorporated associations or bodies of persons, superannuation funds and approved deposit funds with a total annual revenue of $100 million. Further, and subject to consultation, it is proposed that reporting requirements will apply to all entities headquartered in Australia, or entities that have any part of their operations in Australia and meet the revenue threshold.

Key industries affected are likely to be construction, electronics, hospitality and those industries with changeable multi-national supply chains or with high proportions of migrant workers. While the scheme’s reporting obligations would apply to large businesses, smaller businesses operating in a supply chain may be exposed to greater scrutiny by their principal contractors or clients.

The definition of operations and supply chains for the purpose of reporting is yet to be developed; however, it is proposed that the definition of supply chains extend beyond first tier suppliers.

At this stage it is not proposed that the reporting requirement apply to Commonwealth Government or State and Territory Government procurement.

Reporting Criteria

The proposed Australian reporting requirement will require entities to report against the same criteria set by UK reporting requirements, but unlike the UK where reporting against criteria is optional, it is proposed that it be mandatory for entities here to report against a consolidated set of four criteria:

  1. The entity’s structure, its operations and its supply chains;
  2. The modern slavery risks present in the entity’s operations and supply chains;
  3. The entity’s policies and process to address modern slavery in its operations and supply chains and their effectiveness (such as codes of conduct, supplier contract terms and training for staff); and
  4. The entity’s due diligence processes relating to modern slavery in its operations and supply chains and their effectiveness.

The Australian Government will provide further guidance as to the nature and extent of the information that should be included in statements – in consultation with business. The statements must be approved at board level or equivalent and must be published on the business webpage.

Like the UK, no punitive penalties will be imposed for non-compliance, but businesses may be named and shamed and exposed to public criticism. Further consideration will also be given to whether or not the reporting scheme is subject to independent oversight.

Ai Group is seeking member feedback about the proposed reporting scheme. To provide feedback please contact Nicola Street, Ai Group’s National Manager – Workplace Relations Policy.

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Nicola Street
As Ai Group's National Manager – Workplace Relations Policy, Nicola is involved in employment test cases and law reform affecting the workplaces of industry. She regularly appears in the Fair Work Commission and Government Inquiries on behalf of Ai Group members, and has many years of “on the ground” strategic experience in advising employers in employment law and people & culture strategies.

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