The Australian Attorney-General’s Department has commenced a consultation on potential amendments to the Modern Slavery Act. The Act requires entities based or operating in Australia with annual consolidated revenue of A$100 million to annually submit a modern slavery statement describing their actions to assess and address modern slavery risks in their operations and supply chains. This post discusses the consultation, which is open until September 1.
The consultation was preceded by a statutory review of the first three years of reporting under the Act and the government’s December 2024 response to the statutory review. In its response, the government agreed in full, in part or in principle to 25 of the 30 recommendations from the review. The government’s response is discussed in detail in this Ropes & Gray post. The Act is described in further detail in Ropes & Gray Alerts here, here, here and here.
The Attorney-General’s Department has indicated it is conducting the consultation since many of the review’s recommendations are significant and complex and require careful consideration in consultation with business and broader community stakeholders.
The Consultation Paper published by the Attorney-General’s Department outlines options to enhance, simplify and improve Modern Slavery Act reporting, and to target non-compliance. These options draw on and respond to feedback received from the earlier review.
In the consultation, the Attorney-General’s Department is seeking feedback from stakeholders about the options outlined in the paper, including how they would operate in practice and whether they would effectively enhance the Act. Responses will inform future government consideration of potential measures to strengthen the Act. These are expected to consist of a combination of legislative reforms and, thereafter, guidance and administrative changes.
The survey is organized into five principal parts, as further discussed below.
- Mandatory reporting criteria (11 questions);
- Compliance and enforcement framework (13 questions);
- Joint reporting (6 questions);
- Voluntary reporting (5 questions); and
- Notification requirements to cease as a reporting entity (2 questions).
The first three of these topic areas are discussed below.
Mandatory Reporting Criteria
The review recommended that some elements of the current reporting criteria be expanded, clarified and refined. The review also recommended consideration be given to moving the reporting criteria to delegated legislation (such as regulations or rules) to allow flexibility in revising the criteria over time.
Some of the specific changes on which the Attorney-General’s Department is seeking stakeholder views include those below. The Department proposes to retain the core reporting criteria currently in the Act.
- Amend the current requirement to identify the reporting entity to also require the modern slavery statement to identify the entities owned/controlled by the reporting entity.
- Clarify the current reporting requirements to indicate that the reporting entity describe its actions to monitor the implementation and effectiveness of actions taken to identify, assess and address modern slavery risks. Currently, the Act more generally requires the reporting entity to provide a description of how it assesses the effectiveness of its actions, without explicitly referencing monitoring actions.
- Adopt delegated legislation that requires the reporting entity to report on the actions it is taking to address modern slavery risks, such as specifically (1) internal governance processes, (2) organizational policies, (3) staff training and (4) engagement with internal and external stakeholders.
- Add a new item that requires the reporting entity to provide information about its grievance mechanisms. The Consultation Paper indicates that specific reporting requirements related to grievance mechanisms could be outlined in delegated legislation.
- The consultation asks for feedback regarding any sensitivities relating to quantitative or qualitative information about grievance mechanisms that might be captured.
- Move to a stand-alone item the requirement that a reporting entity report on its processes and actions to remediate modern slavery incidents. The current criterion in the Act requires the reporting entity to describe the actions taken by it to assess and address identified risks, including due diligence and remediation processes. The Consultation Paper indicates that specific reporting requirements related to remediation could be outlined in delegated legislation.
- The consultation is soliciting feedback on whether reporting on remediation should be a separate mandatory reporting criterion and, if so, what specific information about remediation actions and processes entities should report and any sensitivities associated with reporting. The review explored requiring entities to report on the number of matters referred to law enforcement or other bodies and details of modern slavery incidents or actual risks.
- The consultation also seeks input on whether there are specific safeguards that should be considered to protect workers in respect of reporting on grievance mechanisms and remediation.
- In addition, the consultation asks for feedback on whether a new item should be added that requires entities to report on key actions or changes since their last statement.
Compliance and Enforcement Framework
There currently are no penalties for non-compliance with the Act. To enable an effective and proportionate response to instances of non-compliance, the Attorney-General’s Department is seeking views on options for an enhanced compliance framework.
This enhanced compliance framework could potentially include expanded or additional regulatory powers, including infringement notices, redaction powers and civil penalties. This could include penalties for (1) failing to submit a statement, (2) providing false or misleading information and (3) failing to comply with a request for remedial action.
Questions in this section of the consultation on which the Department is seeking feedback include the following, among others:
- Would additional or enhanced guidance be sufficient to address current non-compliance?
- Would the regulator’s current power to request remedial action or publish information regarding non-compliance be sufficient to address current non-compliance?
- Would broader information gathering powers be more effective to address non-compliance?
- Should infringement notices, enforceable undertakings and redacting a statement be introduced as additional regulatory tools to respond proportionately to non-compliance?
- Should civil penalties be introduced and, if so, for what violations?
- Should any defenses, such as mistake of fact, be considered for any proposed civil penalties?
Joint Reporting
The Act permits entities to submit a modern slavery statement on behalf of one or more reporting entities.
To address challenges with joint reporting, the Attorney-General’s Department is seeking feedback on replacing the current joint reporting procedures with mandatory corporate group reporting. Under this approach, the modern slavery statement would be submitted by the highest entity (parent entity) within the consolidated corporate group, on behalf of all entities within that group. The highest entity would be required to report on all owned and controlled entities, even if they do not meet the reporting threshold, to ensure that transparency relating to additional entities within the group structure is adequately covered. Any compliance action would be taken against the highest entity.
As proposed, an entity could apply to the regulator to alter the default reporting arrangements, to allow another entity to report on its behalf (a nominee reporting entity) or certain entities within the group to report individually.
Among other things, the consultation seeks feedback on this approach, any new challenges that might be encountered and whether the proposed exemptions for nominee and subsidiary reporting entities provide appropriate and sufficient accommodations for different business structures and whether additional exemptions should be considered.
Guidance and Administrative Changes
Subject to the outcome of the consultation, the Consultation Paper contemplates both legislative reforms and guidance and administrative changes. Following any legislative changes and enhancements to the Act, the Attorney-General’s Department plans to release new and enhanced comprehensive guidance to support reporting. The guidance is expected to address several of the recommendations from the review, including the following:
- Clarity on whether an entity is a reporting entity;
- Revised guidance on reporting criteria;
- Introduction of a mandatory coversheet; and
- Further guidance on the approval and signature requirements under the Act.
Participating in the Consultation
Interested persons can participate in the consultation via an online survey format. Alternatively, a written submission can be uploaded. The survey is available here.
The Attorney-General’s Department also will be conducting targeted consultations with relevant specialists on more complex issues, including (1) written declarations of high-risk matters and (2) how the Act could be amended to enhance its due diligence requirements. Broader consultations also may occur in due course.
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