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Australia Follows Suit with Modern Slavery Reporting Requirements

Australia is set to be the next country to enact legislation to address modern slavery, after the recent publication of a Consultation Paper by the Australian Government. The UK became the first country to require reporting of this kind through the Modern Slavery Act (the “MSA”), which came into effect in 2015 and appears to have been well received by the business community.

The paper proposes a requirement that businesses report publicly on their efforts to address labour exploitation and slavery-type issues in both their operations and supply chains. It follows a multi-stakeholder working group recommendation in 2016 to introduce a reporting requirement, and an earlier Parliamentary committee recommendation to improve transparency in supply chains.

The reporting requirements are anticipated to operate much like the UK law in that they will capture non-Australian businesses operating in Australia. Indeed the Consultation Paper proposes to harmonise new requirements with the MSA to minimise the impact on companies subject to reporting in multiple jurisdictions. Businesses with a turnover of AUD 100 million or more (approximately USD 78 million at time of writing) would be caught by the reporting requirements. This is higher than the minimum threshold for a business operating in the UK to be subject to reporting under the MSA (GBP 36 million, or roughly USD 48 million). An estimated 2,000 businesses operating in Australia would be affected, and those which are not required to report may do so voluntarily in an effort to establish a new best practice. Companies operating in Australia should be aware that the effects of reporting (either by requirement or voluntarily) will be reputational as well as legal.

Businesses need to continue to educate themselves on the rapidly evolving area of human rights law and the continuing trend of new national legislation in this area. Getting caught behind the curve on this issue could have both legal and reputational consequences.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.