Proposed Act Seeks to Require Large Companies Operating in Australia to Report on Modern Slavery

by Littler

The Australian Government has announced plans to release draft legislation proposing the introduction of a “modern slavery in supply chains” reporting requirement.  The proposal is expected to be released in April 2018 and could require all companies operating in Australia and meeting a threshold of $100 million in total annual global revenue to report annually on their efforts to address modern slavery in their operations and “supply chains”(the “Proposed Act”).  If enacted, the Proposed Act will add to the increasing number of national laws that place direct obligations on certain companies to report upon efforts to identify and mitigate human rights risks such as human trafficking, child labor, and other forms of forced labor from their global operations.   

Why is the Australian Government Proposing this Law?

In a Public Consultation Paper and Regulation Impact Statement issued in August 2017 (the “Consultation Paper”),2 the Government acknowledged that human trafficking, forced labor, debt bondage and other severe human rights violations – collectively defined as “modern slavery” in the proposed statutory definition3 – occur in Australia.  Authorities have identified victims in a range of industries, including domestic service, hospitality, construction, and sex work.  Since 2004, the Government has identified 350 suspected victims of modern slavery and prosecuted 55 individuals under criminal laws. 

In the Consultation Paper, the Government asserts that the risk of modern slavery exists even within large companies in high-risk industries “with complex and changeable multi-national supply chains.”  Drawing on its support for the United Nations Guiding Principles of Business and Human Rights,4 the Government has emphasized that companies should respond to human rights issues that are directly linked to their operations, products or services.5 The Consultation Paper also recognized that while other countries – including the United Kingdom, the United States, France, and the Netherlands, as well as the European Union – have strengthened national laws on modern slavery, the current Australian regulatory framework does not directly encourage companies to take action to combat modern slavery. 

Accordingly, the Government’s stated purpose for the Proposed Act is to:  “equip and enable the business community to respond effectively to modern slavery and develop and maintain responsible and transparent supply chains.”  Importantly, the Government intends that the reporting requirement in the Proposed Act will improve information available to consumers and investors about company efforts in combatting modern slavery.  Thus, as with laws like the UK Modern Slavery Act and the California Transparency in Supply Chains Act,6 the Proposed Act intends to place market pressure on companies to prevent, identify, and eliminate modern slavery practices in companies’ operations and amongst business partners.     

What Companies are Covered Under the Proposed Act?

The Government’s current proposal is to cover a broad range of entities, including corporate bodies, unincorporated associations or bodies of persons, superannuation funds and approved deposit funds – regardless of industry or sector or the level of risk for “modern slavery.”  Any of these entities that are either headquartered in Australia or have “any part of their operations in Australia” and meet the revenue threshold of $100 million in total annual global revenue, are subject to the Proposed Act.  Thus, as an illustration, a U.S.-based multinational meeting the revenue threshold with even minimal operations in Australia may be a covered entity. 

Moreover, the Government intends to broaden the scope of the Proposed Act beyond these large companies.  Indeed, it plans on issuing guidance to encourage smaller entities to “opt in” to the Proposed Act.7  

What do Covered Entities Need to do?

The Proposed Act, if enacted, will require covered entities to publish a “Modern Slavery Statement.”  This obligation, along with the general content and format of the Proposed Act, borrows largely from the UK Modern Slavery Act, which requires certain large companies operating in the UK to produce a “slavery and human trafficking statement” each financial year, disclosing their efforts (or lack thereof) to ensure that their own operations and business partners are free from slavery and human trafficking.8 The Government also likens this obligation to Australia’s Commonwealth Workplace Gender Equality Act 2012, which requires private sector entities with 100 or more employees to submit annual reports to the Government regarding a range of gender equality indicators. 

In limiting the obligation to publishing a Modern Slavery Statement, the Consultation Paper makes explicit that the Government intends to diverge from the model presented by recent French legislation, which requires certain companies to actually undertake (as opposed to simply report) due diligence measures to identify and respond to human rights abuses.9 The Government sees the French model as creating a “regulatory impost” that does not fit the Australian context. 

What Must be Included in the Modern Slavery Statement?

The Modern Slavery Statement must, at a minimum, include information about:

  • The covered entity’s structure, its operations and supply chains;
  • The modern slavery risks present in the covered entity’s operations and supply chains;
  • The covered entity’s policies and process to address modern slavery in its operations and supply chains (including codes of conduct, supplier contract terms, and trainings for staff) and their effectiveness; and,
  • The covered entity’s due diligence processes relating to modern slavery in its operations and supply chains and their effectiveness.

What is a “Supply Chain”?

The Government has not yet defined the term “supply chains,” and intends to publish detailed guidance on this soon.  For now, the Consultation Paper simply proposes that the definition of supply chains extend beyond first-tier suppliers.

Though we await further developments, we note that the term “supply chain” is both fraught and outdated, and the ultimate scope and meaning of this term raises a host of practical challenges and concerns.

When and Where Must the Modern Slavery Statement be Published?

The Proposed Act intends that each covered entity must publish its Modern Slavery Statement annually, within five months after the end of the Australian financial year.10  The Statement must be posted on the entity’s webpage and the Statements will be available on a free, publicly accessible central repository. 

What are the Consequences for Non-Compliance?

Currently, the Government has not proposed any penalties for non-compliance with the proposed obligations.  The Government has, however, stated in the Consultation Paper that it will monitor compliance and “entities that do not comply with the reporting requirement may be subject to public criticism.” 

What Should Companies do in Preparation? 

Companies should prepare for the introduction of the Proposed Act by first taking stock of their own operations and those of their suppliers and other business partners, and identifying areas in those operations where there is a high risk of forced labor and other “modern slavery” practices.  Where such risks are identified, companies should take appropriate action to address those risks and also implement procedures to ensure that new and existing relationships remain free of such activities.  This due diligence process can be complex so we recommend engaging the services of experienced counsel. 



1 The term “supply chains” is used throughout the Consultation Paper but, as discussed and utilized in this article, has not yet been defined.

2 Australian Government, Attorney-General’s Department, Modern Slavery in Supply Chains Reporting Requirement – Public Consultation Paper and Regulation Impact Statementavailable at

3 The Government proposes to define “modern slavery” as conduct that would constitute an offense under Divisions 270 and 271 of the Commonwealth Criminal Code, encompassing slavery, servitude, forced labor, debt bondage, deceptive recruiting for labor or services, and human trafficking. 

4 These principles do not “creat[e] new international law obligations,” but rather define governments’ and companies’ already-existing obligations to protect human rights and remedy violations.  (A copy of the UN Guiding Principles, published by the Office of the United Nations High Commissioner for Human Rights, is available online at   The UN Guiding Principles comprise three “pillars”: Pillar One – the state duty to protect against human rights abuses by business; Pillar Two – the business responsibility to respect human rights; and, Pillar Three – the responsibility of states and business to provide effective access to remedies.

5 The United Nations Working Group on Business and Human Rights has applauded the Government’s efforts to enact the Proposed Act, but has advised that such a law should be part of a broader National Action Plan, which would operationalize the government’s role in encouraging responsible business conduct, as envisioned under the “soft law” norms of the United Nations Guiding Principles on Business and Human Rights (the “UN Guiding Principles”).  See Surya Deva, Letter to Ambassador John Paton Quinn, December 18, 2017, available at

7 For now, the Government does not intend the Proposed Act to create any new obligations for Commonwealth or state and territory procurement.  The Government believes that procurement is already appreciably governed by a legislative framework on ethical sourcing.  

8 United Kingdom Modern Slavery Act 2015, available at

9 See Michael Congiu, Stefan Marculewicz, John Kloosterman, Stephan Swinkels, Aaron Saltzman, and Lavanga Wijekoon, Dutch and French Legislatures Introduce New Human Rights Due Diligence Reporting Requirements, Littler Insight (Mar. 3, 2017). On March 23, 2017, the French Constitutional Court declared that the French law is constitutional and will remain on the books, albeit without the corresponding financial sanctions for companies. 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Littler | Attorney Advertising

Written by:


Littler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.